Indexed universal life (IUL) provides a death benefit along with a cash value that accrues interest based on the performance of an index or indices. Recently, the Hong Kong Insurance Authority (HKIA) has offered practical guidance to ensure policyholder protection and fair treatment of customers with regard to IUL. In this e-alert, we examine the mechanics of IULs and some of the key considerations for companies preparing to offer such products in Hong Kong, including:

• Product design
• Investment strategy and crediting mechanism
• Strategic asset allocation and risk management
• Hong Kong risk-based capital