What must insurers provide to a policyholder regarding dividends for participating policies?

Insurers are required to provide policyholders of participating policies with an annual report regarding dividends. This report generally includes information about the dividends that have been declared, how they are calculated, and the basis upon which they are paid out. This helps policyholders understand the financial performance of their policies and the distribution of dividends, which enhances transparency and informs them about the potential growth of their investment.

The annual report is essential because it ensures that policyholders are aware of the dividends they may receive and the overall performance of the insurer. By providing this information regularly, insurers help maintain clarity and trust with their customers, allowing them to make informed decisions about their policies and any potential benefits.

In contrast, while other options may seem appealing, they do not reflect the actual requirements set forth in insurance regulations regarding dividend disclosures. For instance, monthly dividend payments or guaranteed dividend statements are not standard practices mandated by insurers, and details about potential early withdrawals are typically not included in this context. The focus here is specifically on the annual report, which provides comprehensive insight into the dividends associated with participating policies.