These arrangements refer to internal processes, functions and strategies aimed at designing and bringing products to the market, monitoring and reviewing them over their life cycle.
European Insurance and Occupational pensions Authority (EIOPA) welcomes comments on the Guidelines on product oversight & governance arrangements for insurance undertakings. The consultation package includes consultation paper and template for comments.
EIOPA carries out consultations in the case of Guidelines and Recommendations in accordance with Article 16(2) of the EIOPA Regulation. This Consultation Paper is being issued to consult the public on a proposal for Guidelines on product oversight & governance arrangements by insurance undertakings.
This Consultation Paper presents the draft Guidelines and the explanatory text. The analysis of the expected impact from the proposed policy is covered under the Annex I (Impact Assessment).
The arrangements need to contain steps to, at least:
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identify a target market for which the product is considered appropriate,
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identify market segments for which the product is not considered appropriate,
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carry out product analysis to assess the expected product performance in different stressed scenarios,
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carry out product reviews to check if product performance is leading to consumer detriment and, in case this occurs, take actions to change its characteristics and minimise the detriment,
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identify the relevant distribution channels taking into account the characteristics of the target market and of the product, and
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verify that distribution channels act in compliance with the manufacturer’s product oversight and governance arrangements.
Product oversight and governance arrangements could be part of the system of governance within the manufacturer. However, implementing product oversight and governance arrangements is not be understood as introducing a new mandatory key function nor are they necessarily linked with the risk management, internal audit, actuarial or compliance functions prescribed by Solvency II. Still, the administrative, management or supervisory body of insurance undertakings is responsible for the establishment and subsequent reviews of the product oversight and governance arrangements.
EIOPA will consider the feedback received and expects to publish a final report on the consultation and to submit the Guidelines for adoption by the Board of Supervisors in Q2 2015. Comments should be provided to EIOPA by 23 January 2015.
Consultation paper
© EIOPA
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