Investment by its very nature generally involves an element of risk-taking and as Minister for Industry and Commerce I cannot insulate life assurance proposers from whatever risk may be attached to the investment element of life assurance policies. The decision on whether to take out such policies, and hence to participate in the reward and the risk, including decisions as to what may constitute a fair return on their investments, must ultimately rest with insurance proposers.
However, I am concerned that insurance proposers should be given the fullest information possible to enable them to make informed decisions on the taking out of life assurance policies which have an investment element. There has already been significant progress in this regard. In response to calls from my Department and the Director of Consumer Affairs and Fair Trade, the insurance industry introduced in January 1988 a code of practice which provides for a cooling-off period during which the proposer can withdraw from a life assurance policy without financial loss. Under this code, insurance proposers also receive a document explaining the pros and cons of assurance policies, including the risk element involved.