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New advertising standards for investment policies only

Chapter 4 of the proposed new Policyholder Protection rules contains details regarding advertising standards specifically applicable to investment business.

No projected benefits (including but not limited to maturity, income, death, disability or (partial) surrender benefits) may be included in advertisements, brochures or similar communications if the policy benefits depend on future unknown investment performance, unless used to demonstrate the benefits of savings generally.

When past investment performance is provided for or referred to in advertisements, brochures or similar communications –

  1. all information must be accurate and must be provided in the correct context, and the insurer must be able to substantiate all claims made; and
  2. a statement must be included that past performance cannot be extrapolated into the future and is not an indication of future performance.

If tax advantages are referenced in advertisements, brochures or similar communications, such advantages must be explained, and any key restrictions, penalties, and mitigating circumstances must be disclosed.

Any reference to guaranteed elements or features must indicate whether the guarantee is subject to any requirements and conditions and where disclosure of those requirements and conditions can be found.

Where a policy is used as a “wrapper” for a collective investment scheme portfolio referred to in the Collective Investment Schemes Control Act No. 45 of 2002, or where a policy provides for investment of policyholder’s funds into collective investment schemes portfolios, any advertisements, brochures or similar communications must comply with any determination of advertising and marketing requirements for collective investment schemes made under the Collective Investment Schemes Control Act No. 45 of 2002.

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