Cross-border consultancy business Acuity has unveiled a service to help life companies to implement key aspects of newly-established regulatory requirements.
The service is called ‘product oversight and governance (Pog)’ and it is designed to help insurers deal with issues that affect both them and the financial advisers who recommend their products to clients.
Under the EU Insurance Distribution Directive (IDD) and non-EU Conduct of Business Codes, cross-border life companies now need to ensure that:
- Customers are treated fairly at all stages of the contractual relationship;
- The products promoted meet the needs of customers at outset and on an ongoing basis; and
- Any conflicts of interest in the distribution delivery chain are managed appropriately.
This presents a series of regulatory product oversight and governance challenges for the life companies that includes monitoring the way their products are distributed.
Details of Pog service
Acuity’s Pog service helps insurance firms meet their product oversight and governance responsibilities under the regulations outlined above.
It is focused on delivering external, independent and objective assessments, based on qualitative or quantitative research that Acuity conducts covering issues such as:
- Target client market verification;
- Product concept testing;
- Customer-facing communication testing; and
- Ongoing product monitoring.
To ensure its Pog service will cover markets as diverse as the UK, Europe, Middle East and Asia; Acuity told International Adviser that it uses its relationships with adviser groups and trade bodies around the world to source advisers and target market clients to take part in research.
Meeting regulatory requirements objectively
Simon Willoughby, managing director of Acuity, said: “Establishing a product oversight and governance (Pog) group and designing a compliant product approval process will be driven by the life company and generally managed internally.
“However, conducting all the Pog analysis on an internal basis risks the regulatory accusation of the life company ‘marking its own homework’; especially if it surveys its existing policyholders rather than prospective target customers, believes its distributors to be a proxy for the end customer or relies on the feedback of its own sales team.
“The issue for cross-border life companies is how to meet their new regulatory requirements objectively.
“We work with the product oversight and governance groups or the marketing and product development teams within the life companies to specify the parameters of the research required.
“We then work with our network of partners to deliver independent and objective reports quickly and cost effectively,” Willoughby added.
