An external unit-linked fund is managed by whom?

The correct answer is that an external unit-linked fund is managed by a separate fund manager not connected with the life company. This structure is designed to ensure that the investment management of the fund is independent from the life insurance company's other operations, allowing for a focus on investment performance without potential conflicts of interest.

By utilizing an external fund manager, the life company can provide its policyholders with a variety of investment options that are managed by specialists who may have more expertise in particular investment strategies or asset classes than those employed by the life company itself. This approach is often seen in unit-linked insurance products where policyholders have the flexibility to choose from several investment funds, thus giving them the opportunity to align their investment choices with their own risk tolerance and financial goals.

The other choices involve scenarios that could lead to less optimal management of unit-linked funds. For example, if a life company's own investment managers were in charge, it could create a conflict of interest where the primary goal could shift from maximizing returns for policyholders to benefiting the life company directly. Similarly, a manager chosen solely based on the life company's performance metrics might not necessarily be the best fit for managing investments in a way that aligns with policyholder interests. Involvement of a regulatory body would also not