Chile Financial Market Commission consults on life annuity pension recalculation changes for disqualified survivor beneficiaries and advance pension increases

The Chile Financial Market Commission has published for consultation a proposal to amend Circular Letter No. 2,062 on the recalculation of life annuity pension insurance policies under Decree Law No. 3,500 of 1980. The changes address two specific issues: how pensions should be recalculated when a legal beneficiary loses survivor pension eligibility because of certain criminal convictions, and how advance payments may operate under the additional Deferred and Lifetime Pension Increase clause. One amendment adds a recalculation procedure for cases covered by Article 5 bis of Decree Law No. 3,500, which the National Congress has approved and is pending publication in the Official Gazette. Under that article, a person convicted as perpetrator, accomplice or accessory to certain crimes under the Penal Code and the Domestic Violence Act cannot receive a survivor's pension if the victim is the person for whom the pension is intended. The proposal also regulates advance payments under the Deferred and Lifetime Pension Increase clause. That clause may be contracted with an Immediate Life Annuity Policy only for old-age and disability pensions when it is incorporated into the Pension Amount Inquiry and Offer System, or SCOMP. The advance may be paid as a one-time payment if the increased monthly life annuity benefits have not yet started. The consultation will run for four weeks. The commission has also published a regulatory report setting out the core elements of the proposal.