What is the main role of the California Financial Services Commission (FSC) concerning Variable Life products?

The California Financial Services Commission (FSC) plays a crucial role in the regulation of various financial products, including Variable Life insurance products. The main focus of the FSC regarding these policies is to regulate the investment aspect. This is particularly important as Variable Life insurance combines life insurance with investment components, allowing policyholders to allocate portions of their premiums to various investment options.

Regulating the investment aspect of Variable Life policies ensures that companies adhere to guidelines that protect consumers, maintain market integrity, and ensure that the investment accounts associated with these products operate fairly and transparently. The FSC’s oversight helps to ensure that the risks associated with the investments are properly communicated to policyholders and that the companies managing these investments are doing so in a compliant manner.

In contrast, functions such as setting premium rates are typically handled by insurers based on underwriting guidelines and market conditions. Marketing and advertising oversight is generally directed at ensuring truthfulness and accuracy, rather than overseeing all life insurance products comprehensively. Lastly, administering licensing exams falls under the purview of regulatory bodies but is not specifically the FSC’s primary responsibility regarding Variable Life policies.