PINS S4.5 Risk management policy — product design risk

An insurer's risk management policy for product design risk should include:

(a) the product classes and types of risks in which the insurer chooses to engage;
(b) setting a business case for new or enhanced products;
(c) market testing and analysis;
(d) cost-benefit analysis;
(e) requirements for limiting risk through measures such as diversification, exclusions and reinsurance (including confirmation that the existing reinsurance will provide protection or new reinsurance protection is being provided);
(f) processes to ensure that policy documentation is adequately drafted to give legal effect to the proposed level of cover under the product;
(g) an implementation plan for the product, including milestones;
(h) clearly defined and appropriate levels of delegation for approval of all material aspects of product design;
(i) post-implementation review; and
(j) methods for monitoring compliance with product design policies and procedures.
Inserted by QFCRA RM/2013-1 (as from 1st January 2015).