Insurers Selling Holloway Policies to be Exempt from RDR

The Financial Services Authority have announced that mutual insurers who sell Holloway policies will be exempt from the upcoming retail distribution review ( RDR) , but will be required to review maturity values annually to maintain such exemption. Holloway providers will need to demonstrate that no more than 5% of their policies had a projected maturity value between 20% and 25%, with the rest having values of less than 20%. If the requirements aren't met then the exemption will be withdrawn. The FSA stated "If a firm finds, when making an assessment, that more than 5% of policies are expected to exceed the 20% threshold, it will need to take action within three months to ensure the exemption conditions are met, for example, by re-pricing the products or by amending the way it allocates surplus." Advisers who only sell exempt Holloway policies will not need to adhere to the adviser charging and professionalism rules in the RDR.
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