• CIPR Part 6.6 CIPR Part 6.6 Cancelling insurance contracts

    • CIPR 6.6.1 Cancellation terms — general

      (1) Every insurance contract that is issued or sold by an authorised firm must include terms allowing the policyholder to cancel it. The terms must be fair to customers and reasonable and appropriate for the product.
      (2) The terms must be clearly stated in the contract document. For a policyholder who is a retail customer, the contract document must set out:
      (a) the terms allowing the policyholder to cancel the contract;
      (b) the notice requirements, including the notice period; and
      (c) statements of whether any refund of premium would be due on cancellation, how any refund would be calculated and in what circumstances a refund would be payable.
      (3) After a retail customer cancels a policy, the authorised firm concerned must pay any amount due to the customer without delay and no later than 20 business days after the day on which the contract was cancelled.
      Derived from QFCRA RM/2019-2 (as from 1st January 2020).

    • CIPR 6.6.2 Life insurance contracts and retail customers — right to cancel during free look period

      (1) This rule applies to all life insurance contracts, whether or not they have an investment element.
      (2) A retail customer has a right to cancel a life insurance contract within the free look period.
      (3) The free look period is 15 business days beginning on the business day after the day on which the customer receives the final contract document.
      (4) The right to cancel ceases if the customer makes a claim within the free look period.
      Derived from QFCRA RM/2019-2 (as from 1st January 2020).

    • CIPR 6.6.3 Life insurance contracts and retail customers — right to cancel on variation

      (1) This rule applies to all life insurance contracts, whether or not they have an investment element.
      (2) If a life insurance contract held by a retail customer is varied, then, unless the variation is the result of an option pre-selected by the customer, the customer has a right to cancel the contract within 15 business days after the day on which the customer receives the final varied contract document.
      Derived from QFCRA RM/2019-2 (as from 1st January 2020).

    • CIPR 6.6.4 Exercising right to cancel

      (1) A retail customer may exercise the right to cancel under rule 6.6.2 or 6.6.3 by giving notice in a durable medium to the authorised firm concerned. The notice need not use any particular form of words and it is sufficient if the intention to exercise the right is reasonably clear from the notice, or from the notice and the surrounding circumstances.
      (2) The notice need not give reasons for exercising the right.
      (3) The right to cancel ceases if the customer does not exercise it by notifying the firm in accordance with subrule (1) within the period specified in rule 6.6.2 or 6.6.3.
      Derived from QFCRA RM/2019-2 (as from 1st January 2020).

    • CIPR 6.6.5 Consequences of cancellation

      (1) If a retail customer exercises a right under rule 6.6.2 or 6.6.3 to cancel a life insurance contract, the insurer concerned must refund the premiums paid by the customer except that:
      (a) the insurer may deduct any expenses for any relevant medical examination, and a proportionate premium for the period of cover; and
      (b) for a unit-linked plan, the insurer may make an appropriate adjustment to take account of changes in the unit price.
      (2) The refund must be paid to the customer without delay and no later than 20 business days after the day on which the cancellation right is exercised.
      Derived from QFCRA RM/2019-2 (as from 1st January 2020).