Latest edition of the FSMA’s Newsletter for intermediaries includes warning on the marketing of branch 26 / branch VI products linked to investment funds

In the May edition of its Newsletter for intermediaries (available in Dutch or French), the FSMA highlights a number of common points of attention, e.g. the importance of being registered as an intermediary and the conditions of use of the FSMA’s logo, as well as announcing the 4th edition of its AMLCO Day on 9 October 2025, which focuses on intermediaries subject to AML/CFT legislation. One important item to note, though, is the article that sets out the FSMA’s position on branch 26 products (generally designated as 'branch VI products' in foreign jurisdictions, notably in Luxembourg, as per their classification under the EU's Solvency II Directive) linked to investment funds. Branch 26/branch VI products are capitalisation contracts and mostly involve the payout of a certain cash amount, which is authorised in Belgium. According to the FSMA, the legal definition of the term 'capitalisation transactions' (see Article 5, 13° of the law of 4 April 2014 on insurance, 'obligations that are fixed in terms of their duration and amount') only applies to products that involve an obligation to repay such fixed amount (to be understood in the ordinary sense, i.e. in cash). A limited number of foreign branch VI products, however, provide for payment in (a countervalue expressed in) units of investment funds. In the view of the FSMA, this does not equate to 'a specific amount', the equivalent value being by definition variable. In addition, Article 3, § 1 of the royal decree of 14 November 2003 on life insurance stipulates that capitalisation transactions are not linked to investment funds. Both cited articles of law are 'provisions of general interest' and must be complied with by all insurance undertakings and intermediaries in their activities in Belgium. 
 
A question regarding the interpretation of the concept of capitalisation transactions in the Solvency II Directive is currently pending before the competent EU supervisory authority, EIOPA. Awaiting a position at the European level, the FSMA expects that no capitalisation transactions (branch 26 / VI) linked to investment funds be made available on the Belgian market (i.e. for no new contracts to be proposed, nor any additional premium payments made under existing contracts). If necessary, the FSMA will re-examine its position once EIOPA or the European Commission has made known its views; in any event, it will take due account of the applicable provisions of general interest in its analysis. 
 
Insurance intermediaries/distributors are therefore well-advised to take note of these restrictions, if applicable. The Newsletter (NL/FR) is available on the FSMA’s website (see https://www.fsma.be/en/news/newsletter-points-attention-intermediaries-and-amlco-day-2025).

Questions? Contact our Insurance expert Sandra Lodewijckx