NETHERLANDS - Many pension insurers are falling short in their duty of care in situations where contracts offer policyholders freedom of choice on investments, the communications watchdog Authority Financial Markets (AFM) has claimed.
In particular, pension providers have been warned by the AFM that establishing customers profiles and advising clients must be improved, following self-assessment conducted by pension insurers.
The communications regulator also said over half of the insurers have not sent policyholders their uniform pension statements (UPO) within the required period.
On a scale of 0% for not complying at all and 100% for fully complying with pension legislation, the 15 insurers which are said to offer this duty of care scored 64% on average, according to the AFM.
And of 31 pension insurers, 17 have yet to send out all UPOs, while some have yet to send any at all within the allotted 2008 timeframe, the self-assessment revealed.
Although the AFM said it considered the sending out of UPOs during the last quarter of last year as "timely" until now, the authority has now redefined its definition of timely as "no later than the third quarter".
The AFM announced in June that pension funds scored an average of 78% when it came to keeping their participants updated, when it reviewed the self-assessments of pension 504 schemes.
According to the communications regulator, one in 10 pension plans failed to inform its policyholders in time.
The UPO is thought to be one of the most important means of communicating the status of a member's pension, as it provides participants with a yearly update on their claims as well as the future benefits they can expect to receive, under various scenarios.
Besides providing the AFM with data for its risk-based supervision, the self-assessment is also designed to give pension providers an insight into their compliance with pension legislation and highlight potential areas for improvement, said the watchdog.
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