Note d’information 23/5 du Commissariat aux Assurances relative aux résultats du questionnaire qualitatif portant sur le contrôle du respect des règles de conduite par les entreprises d’assurance-vie

The CAA released Information Note 23/5 in order to present the results of a qualitative questionnaire that was sent to life insurance companies in November 2022. The questionnaire aimed to evaluate compliance with the rules of conduct and the maturity level of implemented systems. The questionnaire also prepared companies for on-site inspections on rules of conduct. The CAA analyzed the questionnaire responses and highlighted the main findings and observations.
According to the information note, most life insurance companies have policies or group policies for insurance product validation processes, but the content of these policies is not always adequate or adapted to design and approve insurance products. The questionnaire reveals that the criteria used by life insurance companies to determine a positive target market for their insurance products are not granular enough. Only half of the companies take into account other criteria such as the ability of customers to bear losses, professional situations, or revenues. Furthermore, a limited number of companies determine a negative target market.
The questionnaire results show little or no testing of insurance products before introducing them to the market or providing significant adaptations. Even when tests are conducted, they are mainly in the interest of the insurance company and not in the interest of the policyholder. Most companies do not have recurring processes to verify the compatibility of an insurance product with the target market, level of information, and financial literacy of customers.
In terms of monitoring and reviewing insurance products, the CAA notes that a little over half of life insurance companies have set a defined periodicity for review. While some good practices have been observed, such as analyzing customer complaints, feedback from distributors, and monitoring redemption rates, there is little or no consideration of off-target sales or the profitability of the insurance product for the policyholder as indicators for monitoring insurance products.
The CAA reminds companies of the importance of providing distributors with clear and complete information on insurance products, defined target markets, and established distribution strategies, as well as periodically testing products with „value for money“ criteria and checking that insurance products are distributed to the defined target market. The CAA also urges companies to analyze conflicts of interest specific to the design and distribution of IBIP and to acquire appropriate policies, procedures, and records.
Furthermore, the CAA notes that some life insurance companies have compensation systems that incentivize the sale of certain products, regardless of whether they are in the best interests of clients. The CAA emphasizes that any remuneration system must comply with article 295-7(3) of the Insurance Industry Act, which prohibits distributors from recommending a particular product in exchange for remuneration or other incentives.