This document illustrates how China Taiping Insurance (UK) Co Ltd (CTIUK hereafter) designs, approves, markets and manages our products throughout the products’ lifecycle to ensure they provide fair value and meet our customers’ needs.
We have put together a series of frequently asked questions (FAQs) on our Product Governance and Oversight:
1.How does CTIUK carry out Product Governance and Oversight?
In line with Regulatory requirements, we have established a framework that outlines how we develop, monitor and review our products, comprising of the following 6 steps:
·Stage 1 Investigate – identify target market, customer segment, market competition, etc.
·Stage 2 Draft – design product, contractual clauses, pricing, marketing and distribution strategy.
·Stage 3 Build – establish systems and controls and integrate all resources.
·Stage 4 Test – customer journey and process walk through, stress & resilience testing.
·Stage 5 Deploy – monitor sales based on scale and complexity, report at regular and agreed interval to senior management.
·Stage 6 Review – customer journey review, process and controls review, complete overall assessment, remediate defects and make improvements.
2.For each of CTIUK’s products, what is the intended target market, are there any customers for whom the product would not be suitable, are there any notable exclusions or circumstances where the product will not perform as expected and is there any other information which is relevant to the distributors?
We have created Target Market Statements for all products and they are available to download via our website – click here to view
In every Target Market Statement document, we provide the following information:
·Who is the product designed for?
·Who is the product not appropriate for?
·What are the mandatory product features that will meet the needs, characteristics and goals of the target market?
·Does the product include optional covers and additional benefits?
·How should this product be distributed?
·What should distributors do to ensure the product provides fair value to the end customer?
·Additional Product Literature
3.Does CTIUK’s product approval process identify whether each product provides fair value to customers in the target market, including whether it will continue to do so for a reasonably foreseeable period?
To ensure customers receive fair value for our products, we periodically review the commission, fees or charges passed onto our customers, which must be proportionate to the service and value provided. We have engaged with all our brokers and coverholders to obtain and regularly monitor this information. Care will be taken to ensure no duplicate cover exists or is caused by an add-on where that cover is already provided by the policy.
4.What happens if CTIUK identifies that a product does not provide Fair Value to customers?
We will take appropriate action, through the relevant Committee, to stop any further harm from occurring and inform all our impacted customers and distribution brokers about the remedies being taken. This could include, but is not limited to:
·Adjusting commission and admin fee charges
·Amending distribution arrangements
·Adapting, or withdrawing the product
·Adjust cover or price, where relevant, or a combination of both
5.What information will CTIUK be requesting from distribution brokers to support the assessment of products, and when will CTIUK ask for this?
We have enquired on charges applied to our products and continue to monitor these regularly. We use a third party platform to manage our agencies and we shall keep all relevant data updated within the system, amend TOBAs where necessary, and re-assess the answers from brokers yearly. Any ancillary product or services provided to our customers (including insurance add-ons, non-insurance additional products and retail premium finance), as well as commissions and admin fees charged, which may affect the end price of our insurance product, will be within the scope of our considerations.
Confirmation that the distribution arrangements are consistent with the obligations of the firm under the FCA Handbook including SYSC 10 (Conflicts of interest) and SYSC 19F.2 (IDD remuneration incentives) will be sought and monitored accordingly.