Regulatory Disclosure

Dividend Philosophy
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For participating policy, your policy can earn the investment return of the segregated asset portfolio of the group of business determined by Fubon Life in the form of annual dividend and/or terminal dividend. The annual dividend and terminal dividend are non-guaranteed benefits. Fubon Life aims to ensure fair treatment between different groups of policyowners.

The annual dividend and terminal dividend will be reviewed at least once a year, based on actual experience and investment outlook. Fubon Life will smooth out the volatility of the actual investment return to ensure a stable dividend payment. If there is any change to the annual dividend or terminal dividend scale, you will be informed in writing or by the policy annual statement with explicit reasons for the change.

To determine the annual dividend and terminal dividend payment, Fubon Life will consider the actual experience and the outlook of the following factors:

  • Investment performance factors: This includes the interest earning of the asset portfolio and market value changes of the asset portfolio, reflecting different market factors such as equity price, asset liquidity, credit spread, default risk and exchange rate.
  • Persistency factors: This includes full surrender and partial surrender and the corresponding impact on investments, etc.
  • Claim factors: This includes the cost of providing death benefit and other insured benefits.
Investment Policy, Investment Objectives and Investment Strategy
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The Investment Policy aims to actively monitor and manage investment risk and policy liability and to identify asset with suitable characteristics, tenor and liquidity to meet the cash flow need of the insurance business.

The Investment Objectives are to support the guaranteed benefit of the policies and also to meet the non-guaranteed benefit as illustrated to the policyowners.

The Investment Strategy is to diversify investment risks, to improve capital utilization efficiency, to enhance overall investment returns, and to safeguard the long-term interests of shareholders and policyowners. Should there be any significant changes in the investment strategy, Fubon Life would inform policyowners of the changes, with underlying reasons and impact to the policies.

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To diversify the risk, Fubon Life may invest in securities of different regions, industries, credit ratings, and liquidities. This includes government bonds, corporate bonds and other fixed income assets in US, European, emerging markets, and so on. Fubon Life may also invest in non-fixed income assets including equities, private fund, public fund, mutual fund, index fund, etc. Depending on economy outlook, investment environment, as well as changes in the credit risk, Fubon Life will regularly review and adjust the asset allocation.

The historical figure is not an indicator of future performance of our products.

Fulfilment Ratios & Historical Crediting Interest rates
Fulfillment Ratios of Dividend and Interests Fubon Life HK_disclosure_pdf icon
Historical Crediting Interest Rates of Universal Life Fubon Life HK_disclosure_pdf icon2

Effective Date : 2 JAN 2020

Measure to Manage Potential Conflict

To manage the potential conflict between the company's duty to policyholders and that to shareholders, a written declaration by the Chairman of the Board, an Independent Non-Executive Director and Appointed Actuary will be issued at least annually to ensure that the corresponding principles and philosophies have been fulfilled.

Crediting Interest Rate Philosophy

For universal life policy, your policy can share the investment return of the group of business determined by Fubon Life in the form of crediting interest rate.

Fubon Life aims to ensure fair treatment between policyholders and shareholders and also between different groups of policyholders. The interest credited to the policyholders, and the investment return earned by the shareholders, will both increase / decrease together with the increase / decrease in investment return of the group of business.

The crediting interest rate will be reviewed at least once a year, based on actual experience and investment outlook. Fubon Life will smooth out the volatility of the actual investment return to ensure a stable crediting interest rate. If there is any change to crediting interest rate, you will be informed in writing or by the policy annual statement with explicit reasons for the change.

To determine the crediting interest rate, Fubon Life will consider the actual experience and the outlook of the following factors:

  • Interest rate risk factors: The interest earning of the asset portfolio and its capital gain / loss due to fluctuation of market interest rate
  • Market risk factors: The market value changes of the asset portfolio, reflecting different market factors such as equity price, credit spread, default and exchange rate.
  • Persistency factors: These include full surrender and partial surrender and the corresponding impact on investments, etc.
Investment Policy, Investment Objectives and Investment Strategy

The Investment Policy aims to actively monitor and manage investment risk and policy liability and to identify asset with suitable characteristics, tenor and liquidity to meet the cash flow need of the insurance business.

The Investment Objectives are to support the guaranteed benefit of the policies and to meet the non-guaranteed benefit as illustrated to the policyowners.

The Investment Strategy is to diversify investment risks, to improve capital utilization efficiency, to enhance overall investment returns, and to safeguard the long-term interests of shareholders and policyholders. Should there be any significant changes in the investment strategy, Fubon Life would inform policyowners of the changes, with underlying reasons and impact to the policies.

Fubon Life HK_disclosure_cartoon_businessman2

To diversify the risk, Fubon Life may invest in securities of different regions, industries, credit ratings, and liquidities. This includes government bonds, corporate bonds and other fixed income assets in US, European, emerging markets, and so on. Fubon Life may also invest in non-fixed income assets including equities, private fund, public fund, mutual fund, index fund, etc. Depending on economy outlook, investment environment, as well as changes in the credit risk, Fubon Life will regularly review and adjust the asset allocation.

The historical Crediting Interest Rate is not an indicator of future performance of our universal life products. The declared rates are before deduction of any relevant policy charges, including but not limited to the Premium Charge and Policy Administration Fee, and allowance of Bonus Interest.

Accumulation Interest Rate Philosophy

Your policy can earn accumulated interest if you choose to retain the annual dividend, guaranteed monthly income or cash coupon on your policy. This accumulated interest is non-guaranteed benefit. Fubon Life aims to ensure fair treatment between different groups of policyowners.

The accumulation interest rate will be reviewed at least once a year, based on actual experience and investment outlook. Fubon Life will smooth out the volatility of the actual investment return to ensure a stable accumulation interest rate. If there is any change to the accumulation interest rate, you will be informed by writing or by the policy annual statement with explicit reasons for the change.

To determine the accumulation interest rate, Fubon Life will consider the actual experience and the outlook of the following factors:

  • Investment performance factors: This includes the interest earning of the asset portfolio and market value changes of the asset portfolio, reflecting different market factors such as equity price, asset liquidity, credit spread, default risk and exchange rate.
  • Persistency factors: This includes full surrender and partial surrender and the corresponding impact on investments, etc.
Investment Policy, Investment Objectives and Investment Strategy

The Investment Policy aims to actively monitor and manage investment risk and policy liability and to identify asset with suitable characteristics, tenor and liquidity to meet the cash flow need of the insurance business.

The Investment Objectives are to support the guaranteed benefit of the policies and also to meet the nonguaranteed benefit as illustrated to the policyowners.

The Investment Strategy is to diversify investment risks, to improve capital utilization efficiency, to enhance overall investment returns, and to safeguard the long-term interests of shareholders and policyowners. Should there be any significant changes in the investment strategy, Fubon Life would inform policyowners of the changes, with underlying reasons and impact to the policies.

Fubon Life HK_disclosure_cartoon_businessman_gold coin

To diversify the risk, Fubon Life may invest in securities of different regions, industries, credit ratings, and liquidities. This includes government bonds, corporate bonds and other fixed income assets in US, European, emerging markets, and so on. Fubon Life may also invest in non-fixed income assets including equities, private fund, public fund, mutual fund, index fund, etc. Depending on economy outlook, investment environment, as well as changes in the credit risk, Fubon Life will regularly review and adjust the asset allocation.

The historical accumulation interest rate is not an indicator of future accumulation interest rate of our products.

Levy on Insurance Premium

Under the Insurance (Levy) Order and the Insurance (Levy) Regulation, starting from 1 January 2018, the Insurance Authority (IA) will collect a levy on insurance premium from all policyowners on the existing in-force and newly issued insurance policies.

Levy payable is calculated based on a specific percentage to the premium payable per policy year. The levy will be borne and settled by Fubon Life to IA. Details about the levy rate and levy cap can be referred to the table below.

Levy Rate and Levy Cap of Life Insurance Policy
Policy Date / Policy Anniversary Levy Rate Levy Cap (HK$)
From 1 January 2018 to 31 March 2019 (both dates inclusive) 0.040% $40
From 1 April 2019 to 31 March 2020 (both dates inclusive) 0.060% $60
From 1 April 2020 to 31 March 2021 (both dates inclusive) 0.085% $85
From 1 April 2021 onwards (date inclusive) 0.100% $100

Still got questions? Please see FAQs below.

Should you need more information about levy, you may……

  • Call our Customer Service Hotline at (852) 2516 0133
  • Visit website of IA at www.ia.org.hk or call them at (852) 2867 2565
FAQs
Q1. What is the Insurance Authority (IA)?

The Insurance Authority (IA) is a new insurance regulator independent of the Government. The objectives of its establishment are to modernize the insurance industry regulatory infrastructure, to facilitate the stable development of the industry, and to provide better protection to the policyowners, as well as to comply with the requirement of the International Association of Insurance Supervisors. Thus, IA is financially and operationally independent of the government and industry.

Q2. What is "Levy on Insurance Premium"?

From 1 January 2018, the Insurance Authority (IA) will start collecting a levy on insurance premium from policyowners in accordance with the Insurance (Levy) Regulation and the Insurance (Levy) Order under the Insurance Ordinance. Policyowners of all new or in-force life insurance policies must pay the levy on insurance premium in accordance with the law. For more information, please refer to the following webpage of IA: https://www.ia.org.hk/en/levy.
Policyowners may also obtain the leaflet issued by IA at the following webpage:
https://www.ia.org.hk/en/infocenter/files/IA_leaflet_3Mb.pdf

Q3. Why are policyowners required to pay levy on insurance premium?

The Insurance Authority (IA) is a regulatory body independent of both the Government and the insurance industry. Since 26 June 2017, it has taken over the regulation of insurance companies from the Office of the Commissioner of Insurance, a Government department. The IA will also take over the direct regulation of insurance intermediaries through a statutory licensing regime, thus protecting policyowners in a more comprehensive manner. As an independent regulator, the IA is empowered by the Insurance Ordinance (Cap.41) to collect various fees including a levy on insurance premium from policyowners to be financially independent.

Q4. How can I pay levy on insurance premium?

Pursuant to company policy, Fubon Life will pay the levy on insurance premium on behalf of policyowners and we will notify policyowners about the payment arrangement through related correspondences, such as Standard Illustration and Policy Schedule (applicable to new life insurance policies issued on or after 1 January 2018 only), and Policy Annual Statement (applicable to in-force and new life insurance policies issued on or after 1 January 2018).

Q5. How is levy on insurance premium charged?

In phase 1 (1 Jan 2018 – 31 Mar 2019), the levy rate is 0.04% of single or annualized premium with a levy cap of HK$40 per policy per policy year. The levy rate will increase gradually until it reaches 0.1% from 1 Apr 2021 onwards and the levy cap is HK$100 per policy per policy year. Pursuant to company policy, Fubon Life will pay the levy on insurance premium on behalf of policyowners.

Q6. How does Fubon Life provide a proof of payment to policyowners?

Fubon Life will notify policyowners about the payment arrangement through Standard Illustration and Policy Schedule (applicable to new life insurance policies issued on or after 1 January 2018), and Policy Annual Statement (applicable to in-force and new life insurance policies issued on or after 1 January 2018). For any queries, please contact our Customer Service Hotline at (852) 2516 0133 for details.

Q7. Will Fubon Life stop paying levy on insurance premium for policyowners in the future?

Fubon Life will review the payment arrangement of levy on insurance premium regularly and reserves the right to revise the payment arrangement.