Product Approval Process

Manufacturers are to maintain, operate and review a product approval process for newly developed insurance products and for significant adaptations of existing insurance products. That process shall contain measures and procedures for designing, monitoring, reviewing and distributing insurance products, as well as for corrective action for insurance products that are detrimental to customers.

The measures and procedures shall be proportionate to the level of complexity and the risks related to the products as well as the nature, scale and complexity of the relevant business of the manufacturer.

The product approval process is to be set out in a written document (‘product oversight and governance policy’), which is to be made available to relevant staff.

The product approval process is to ensure that the design of insurance products meets the following
criteria:

− it takes into account the objectives, interests and characteristics of customers (target market);
− it does not adversely affect customers;
− it prevents or mitigates customer detriment; and
− supports a proper management of conflicts of interest.

Manufacturers designating a third party to design products on their behalf will remain fully responsible for compliance with the product approval process.

Manufacturers are to regularly review their product approval process to ensure that that process is still valid and up to date. They shall amend the product approval process where necessary.