Our client is an international insurer that provides specialised risk solutions globally across a wide range of industries. The insurer's head office is in London.
Background:
On the 1st of October 2021, The FCA introduced new rules (PS21/5) on Product Governance, Premium Finance and Reporting that apply to most insurance contracts (including retail, speciality and commercial). These are referred to as “Fair Value” requirements.
The rules require an in-depth product review by 30th September 2022. Insurers must identify all their products, the distributors of those products, the role played by those distributors, the prices charged and commissions earned by the distributors and decide if the product offers fair value for the end customer.
Our client is subject to these new “Fair Value” requirements. They commissioned FourthLine as their consulting partner with the objective of achieving compliance with the requirements by the regulatory deadline of 30th September 2022.
How FourthLine helped the client:
In consultation with FourthLine, it was agreed that over 40 products would be in scope for the engagement.
Due to the volume of work and internal resource constraints, the client required Project Governance expertise, Project Management support and resource augmentation to complete the necessary product reviews by 30th September.
Each of the 40+ products required a formal interview with the lead Product Underwriter. For the interviews, FourthLine used a bespoke, client-approved questionnaire and an associated Fair Value Assessment (FVA) template containing the regulated requirements.
Following the population of the FVA template, FourthLine ran workshops with the client’s Conduct Risk team to review the findings from a qualitative perspective and to agree on ratings for each of the Fair Value requirements.
FourthLine then applied quantitative measures to the FVAs which were fed into an analysis tool. The tool supported trend analysis to identify areas of concern, which were used to inform the final report and associated action plan.
The Outcome:
With the help of the FourthLine team, all 40+ reviews and FVAs have been completed and our client is on track to meet the FCA’s deadline well in advance of 30th September.
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