THE JOINT FORUM BASEL COMMITTEE ON BANKING SUPERVISION INTERNATIONAL ORGANIZATION OF SECURITIES COMMISSIONS INTERNATIONAL ASSOCIATION OF INSURANCE SUPERVISORS C/O BANK FOR INTERNATIONAL SETTLEMENTS CH- 4002 BASEL, SWITZERLAND Point of Sale disclosure in the insurance, banking and securities sectors Consultative document August 2013 Point of Sale disclosure in the insurance, banking and securities sectors iii Contents I. Executive summary .................................................................................................................................................................. 1 Background ................................................................................................................................................................................ 1 Methodology ............................................................................................................................................................................. 1 Significant differences identified ....................................................................................................................................... 2 Recommendations ................................................................................................................................................................... 3 II Introduction ................................................................................................................................................................................ 4 II.1 Reasons for action .......................................................................................................................................................... 4 II.2 Methodology .................................................................................................................................................................... 6 III. Scope ............................................................................................................................................................................................ 7 III.1 Characteristics of CIS ..................................................................................................................................................... 7 III.2 Sample of products which compete with CIS ...................................................................................................... 8 III.3 Definition of the products in the sample .............................................................................................................. 8 IV. Regulatory Overview and Analysis .................................................................................................................................. 10 IV.1 Current POS disclosure document requirements ............................................................................................ 11 IV.2 Format and language requirements ...................................................................................................................... 13 IV.3 Content of the POS Disclosure Document ......................................................................................................... 14 IV.4 Regulator review and producers’ and distributors’ responsibility ............................................................. 16 V. Policy recommendations ..................................................................................................................................................... 18 Annex 1: CIS disclosure regimes across jurisdictions ........................................................................................................ 23 Annex 2: List of supervisors that provided responses to the mapping exercise .................................................... 24 Annex 3: Selected recent and upcoming national or international initiatives on consumer protection ...... 25 Annex 4: Disclosure practices related to the content of the POS disclosure document .................................... 29 Point of Sale disclosure in the insurance, banking and securities sectors 1 I. Executive summary Background The mandate for this work related to point of sale disclosure in the insurance, banking and securities sectors was prompted by the Joint Forum’s January 2010 Review of the Differentiated Nature and Scope of Financial Regulation. That report highlighted the fact that supervisory and regulatory standards for similar activities in different sectors, while at times appropriate, could pose risks to financial stability and create regulatory arbitrage opportunities. In particular, the report recommended that the Basel Committee on Banking Supervision (“BCBS”), the International Organization of Securities Commissions (“IOSCO”), and the International Association of Insurance Supervisors (“IAIS”) “work togeth