A key focus of the insurance regulatory authorities around the world has been the protection of policyholder interest. This has resulted in more emphasis on product governance and product life-cycle management. The insurance directive launched under the European Union insurance law has issued guidelines for insurers to embed product oversight and governance into their risk management frameworks.
A robust product governance process can help reduce mis-selling and complaints, and increase policyholder confidence in the market. It can also ensure internal and regulatory compliance for the products offered by the insurer.
The core components of a robust product governance process are:
• Product governance policy
• Product development
• Pricing and value
• Distribution and sales
• Legal, compliance and risk management
• Ongoing assessment of the product