POG Arrangements for insurance undertakings & insurance distributors October 2016
“Insurers and intermediaries need to place consumers at the heart of their business strategies. The tone of this change has to come from the top. These preparatory guidelines will ensure that during 2016 and 2017 supervisors will early engage with the Board and senior managers of market participants to make sure that in 2018 the IDD product governance requirements are in place“ Gabriel Bernardino, Chairman of EIOPA
© 2016. Deloitte Touche Tohmatsu Limited
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POG arrangements in one shot Main key elements
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Current situation •
The comments from the 2 public consultations have been taken into account • The draft guidelines have been consolidated into a final report The final report has been submitted by EIOPA to its Board of Supervisors • The final report has been adopted by EIOPA’s Board of Supervisors
POG time-frame IDD time-frame
Who? •
Insurance undertakings
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Insurance products’ manufacturers
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Insurance distributors
What? •
Customer protection in ensuring that insurance products meet the needs of the target market
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Mitigating mis-selling
POG When?
Why? •
To improve industry reputation due to higher trust by customers
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To make insurance undertakings put the clients’ characteristics , objectives and interests first
•
To provide support and guidance to competent authorities in their preparatory steps leading to a consistent implementation of the organisational requirements on the IDD’s POG arrangements at an early stage
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To enable insurance undertakings to mitigate the risk of different approaches at the national level of IDD implementation and to avoid the need for further alignment for a matter of consistency among member states
© 2016. Deloitte Touche Tohmatsu Limited
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Before the IDD enforcement that should happen beginning January 2018
POG arrangements 2014
2016
2015
2017
2018
POG arrangements 1st Public Consultation
2nd Public Consultation
Review of the preparatory guidelines
Final Report adoption IDD
Draft of POG guidelines
Draft revision
Draft revision
IDD Publication in the EU Official Journal
IDD transposition deadline
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POG arrangements’ context
Insurance Distribution Directive (IDD) POG arrangements of the IDD Product approval process
Product design
Product approval process
Product manufacturing
Product distribution
Product monitoring
POG
Activities Exchange of information • Information related to the insurance product and its approval process made available to the distributor by the manufacturer in order to ensure the distributor’s understanding of both the products’ characteristics and the product’s identified target market • Set-up of adequate arrangements to enhance products’ information sharing between the products’ manufacturers and distributors
Review of existing products • Assessment of their consistency with the identified target market needs • Assessment of the distribution strategy appropriateness of these products
Responsibilities Insurance undertakings and insurance intermediaries which manufacture insurance products for sale to customers
Insurance distributors which distribute insurance products which they do not manufacture
Insurance products manufacturers & Insurance products distributors
Product approval process The Product approval process should be appropriate and proportionate to the nature of the insurance product and it includes the following activities: • Identification of the target market, Source: Final Report on Public Consultation on Preparatory product oversight and governance arrangements by insurance undertakings and insurance distributors • Assessment of the relevant risks to Guidelines the targeton market • Consistency check between the intended distribution strategy and the identified target market • Ensuring that the insurance products are distributed to the identified target market © 2016. Deloitte Touche Tohmatsu Limited
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Contact details Deloitte’s team
Thierry Flamand Partner
Text
[email protected] +352 661 451 469
Michaël Cravatte Director
[email protected] +352 661 451 884
Florent Anders Text
© 2016. Deloitte Touche Tohmatsu Limited
Senior Consultant
Marie-Aude Lemercier Text
Business Analyst
[email protected]
[email protected]
+352 661 451 922
+352 621 568 495
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