A Free Look Period of at least 30 calendar days must be provided to the policyholder. The Free Look Period starts on the date of policy issuance, the date when coverage commences, or the date when the policy documents are signed by the client, whichever is earlier. The Distribution Channels directly involved in the sale process cannot ask for an explanation from the policyholder in case the policyholder determines to cancel or surrender the policy during the Free Look Period.
The Company, or a Distribution Channel representative not directly involved in the sale process, has the right to contact the policyholder to identify the reasons for the cancellation. However, any abuse of this right, such as applying pressure on the policyholder, will be considered a breach of the code of professional conduct.
The Company should have a policy to refund the full premium in case of surrender within the Free Look Period. If the Company determines to adjust the premium using the Net Asset Value of the funds invested, both upward and downward gains / losses must be provided to the client. In the latter case, the Company cannot charge any bid-offer spread or any other charges to the client.
The Company may deduct reasonable medical underwriting costs that have been incurred, for which a receipt and report must be provided to the client. No other costs, including risk premium cost, financial underwriting cost, cost incurred in issuance of policy, etc., can be deducted from the policyholder account. In order to deduct the reasonable medical underwriting costs, they must be approved by the Authority and clearly defined in the product submission to the Authority, as per Article (17) of the Instructions herein, by the Actuary.
Excluding the persons directly involved in sale, the Company must contact the client to confirm that he/she is aware of the policy conditions, maturity, surrender, cancellation and short period schedule.