Day 4: Kofi Annan's Davos diary


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Not surprisingly, the global financial and economic crisis is dominating discussions here. Climate change deserves at least equal attention, not just because of the enormity of the problem, but because solutions to the economic crisis must be environmentally sustainable. Climate change is not just an environmental issue. It has ever-deepening economic implications and is a contributing factor to the background conditions that give rise to conflict. Competition for resources is intensifying and increasing numbers of people are forced to move. Our addiction to fossil fuels is not just bad for the environment but determines the political landscape - both internationally and within countries.

Instead of competition for access to oil and gas fields, we need competition to harness renewable energy, wind, thermal and solar power. The technology exists and is getting better all the time. But the market is still too small, and investment levels are hostage to the volatility of oil prices. It is crazy that as the world heats up both politically and literally, and as evidence mounts of the negative impact of fossil fuels on life, health and food security, we are still fumbling around.

We need nothing less than a global green equivalent of the Marshall Plan. This must include support - financial and technical - to help poorer countries adapt to the effects of climate change. Without such support, there cannot be a fair solution. Any lasting agreement at Copenhagen must recognise that while the poorest 50 countries are responsible for less than one per cent of emissions, they will suffer the worst impact.

This morning Al Gore said that in meetings with advisers, President Barack Obama is always "the greenest person in the room". Nothing could be more encouraging, and the hopes vested in him are enormous. This is a time for decisive political leadership. But business leaders and financiers could do much more. The visionaries are still lone voices. We need serious commitment; I hope we hear it before Davos ends.

* Kofi Annan

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UAE currency: the story behind the money in your pockets
World Sevens Series standing after Dubai

1. South Africa
2. New Zealand
3. England
4. Fiji
5. Australia
6. Samoa
7. Kenya
8. Scotland
9. France
10. Spain
11. Argentina
12. Canada
13. Wales
14. Uganda
15. United States
16. Russia

Key changes

Commission caps

For life insurance products with a savings component, Peter Hodgins of Clyde & Co said different caps apply to the saving and protection elements:

• For the saving component, a cap of 4.5 per cent of the annualised premium per year (which may not exceed 90 per cent of the annualised premium over the policy term). 

• On the protection component, there is a cap  of 10 per cent of the annualised premium per year (which may not exceed 160 per cent of the annualised premium over the policy term).

• Indemnity commission, the amount of commission that can be advanced to a product salesperson, can be 50 per cent of the annualised premium for the first year or 50 per cent of the total commissions on the policy calculated. 

• The remaining commission after deduction of the indemnity commission is paid equally over the premium payment term.

• For pure protection products, which only offer a life insurance component, the maximum commission will be 10 per cent of the annualised premium multiplied by the length of the policy in years.

Disclosure

Customers must now be provided with a full illustration of the product they are buying to ensure they understand the potential returns on savings products as well as the effects of any charges. There is also a “free-look” period of 30 days, where insurers must provide a full refund if the buyer wishes to cancel the policy.

“The illustration should provide for at least two scenarios to illustrate the performance of the product,” said Mr Hodgins. “All illustrations are required to be signed by the customer.”

Another illustration must outline surrender charges to ensure they understand the costs of exiting a fixed-term product early.

Illustrations must also be kept updatedand insurers must provide information on the top five investment funds available annually, including at least five years' performance data.

“This may be segregated based on the risk appetite of the customer (in which case, the top five funds for each segment must be provided),” said Mr Hodgins.

Product providers must also disclose the ratio of protection benefit to savings benefits. If a protection benefit ratio is less than 10 per cent "the product must carry a warning stating that it has limited or no protection benefit" Mr Hodgins added.