POG for insurance products: the answer to a need
One year after the application of IVASS 45/2020 Regulation, we have become increasingly familiar with the POG acronym "Product Oversight Governance" and what it encompasses. It becomes possible and necessary to take stock of the application of the POG safeguards among insurance intermediaries, in addition to its action in the banking sector as we have already addressed.
The basics
From product design, to testing, to monitoring and governance: the IVASS regulation has incorporated new requirements relating to procedures, functions and strategies that companies must develop to design and distribute products, placing the customer at the center of this process.
The monitoring required must be constant and not only on an annual basis in order to avoid prejudice on the part of the customer. The company is obliged to adopt a controlled and verifiable process, in order to highlight any inefficiencies.
The clarifications of the European Commission
As stated by the European Commission, for all insurance products, even the so-called taylor made products designed for a single customer, the POG safeguards must be adopted in a proportionate and appropriate manner to the nature of the product in question. It should be noted in this context that the insurance of large risks is excluded.
To avoid possible misunderstandings, the European Commission has specified that the expression "significant modification of an existing insurance product" refers to an alteration of the essential characteristics of the product, such as risk, price, costs, the reference market and the rights of customers or beneficiaries to receive compensation. The nature of the change must be verified from the perspective of the average customer, taking care to consider the compatibility of the product with the reference market.
Ultimately, adhering to a POG policy does not exclude a possible liability of the manufacturer for any damage suffered by the consumer. Producer liability is a matter of national law and failure to comply with the POG provisions could be a relevant factor that a national court could therefore consider.
The AGS solution
The AGS IT Solution team, thanks to its experience in Banking & Insurance, was able to create a flexible and versatile platform, which integrates well with the management systems already in use by insurance companies and intermediaries.
The software can collect information and communicate with CRM, security systems and e-learning platforms, verify the data to avoid, for example, unnecessary duplication. The customization allows to satisfy even the needs of the most demanding customers.
From design, to testing, to monitoring to governance: it is really easy to manage the entire life cycle of a product, both financial and insurance, thanks to this platform.
Compliance players can work synergistically to reach company goals in compliance with the POG regulations and pass the inspections of regulatory bodies thanks to the centralized collection of information and authorizations.
