The product approval process for each insurance product should identify the target market and the group of compatible customers. The target market shall be identified at a sufficiently detailed level, taking into account the characteristics, risk profile, complexity and nature of the insurance product.
Manufacturers shall only design and market insurance products that are compatible with the needs, characteristics and objectives of the customers belonging to the target market. When assessing whether an insurance product is compatible with a target market, manufacturers shall consider the level of information available to the customers belonging to that target market and their financial literacy.
Manufacturers shall ensure that staff involved in designing and manufacturing insurance products have the necessary skills, knowledge and expertise to properly understand the insurance products sold and the interests, objectives and characteristics of the customers belonging to the target market.
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