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MNB could introduce cost limits on unit-linked life insurance products

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The National Bank of Hungary (MNB) is considering imposing strict limits on the fees of non-pension-based unit-linked insurance products insurers can charge customers by introducing total cost indicator limits, Kornél Kisgergely, the central bank’s managing director responsible for the supervision of financial institutions, said yesterday, according to Hungarian news agency MTI.

Introducing such restrictions would be necessary because the costs of non-pension insurance products are often extremely high, exceeding the upper limit recommended by the MNB and the Hungarian Insurers Association (MABISZ), the managing director said while speaking at an insurance conference organized by portfolio.hu.  

The total cost indicator published by insurance companies for the past six years as part of a self-regulatory practice shows the amount of yield losses suffered by customers on investments due to these costs.

Insurers operating at high costs will be forced to improve efficiency to offset the cost cuts, Kisgergely added.

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