Distribution Channels

Manufacturers are to carefully select the distribution channels that are appropriate for the target market.

Manufacturers must provide insurance distributors with all appropriate information on the insurance product, the identified target market and the suggested distribution strategy, including;

− information on the main features and characteristics of the insurance products,
− their risks and costs,
− including implicit costs,
− and any circumstances which might cause a conflict of interest to the detriment of the customer.

That information shall be clear, complete and up to date.

This information must enable the insurance distributors to:

− understand the insurance products;
− comprehend the identified target market for the insurance products;
− identify any customers for whom the insurance product is not compatible with their needs, characteristics and objectives;
− carry out distribution activities for the relevant insurance products in accordance with the best interests of their customers.

Manufacturers are to take appropriate steps to monitor that insurance distributors act in accordance with the objectives of the manufacturers’ product approval process.

Manufacturers must take appropriate remedial action if the distribution of their insurance products is not in accordance with the objectives of their product approval process.