S.L. 371.21 Art. 16Adequate explanations.

(1) Creditors shall provide adequate explanations to the consumer on the proposed equity release financial product and any ancillary services, in order to place the consumer in a position enabling him to assess whether the proposed equity release financial product and ancillary services are adapted to his needs and financial situation.

(2) The adequate explanations referred to in sub-regulation

(1) shall, where applicable, include in particular:

(a) an explanation of the information and terms included in the pre-contractual information;

(b) the essential characteristics of the product proposed;

(c) the specific effects the products proposed may have on the consumer, including, if applicable, the consequences of:

(i) default in payment by the consumer;

(ii) delayed termination of the equity release financial product due to extended longevity of the consumer; and

(iii) fall in the market value of the residence (the security for the equity release financial product) on termination of the equity release financial product; and

(d) where ancillary services are bundled with an equity release financial product, whether each component of the bundle can be terminated separately and the implications for the consumer of doing so.

(3) The competent authority may adapt the manner by which and the extent to which the explanations referred to in sub-regulations

(1) and (2) are given, as well as by whom they are given, to the circumstances of the situation in which the equity release financial product is offered, the person to whom it is offered and the nature of the credit offered.