Product Design and Distribution Policy
General Insurance Code of Practice
The Insurance Council of Australia Limited has developed the General Insurance Code of Practice (“the Code”), which is a voluntary self-regulatory code. The Code aims to raise the standards of practice and service in the insurance industry.
Introduction
This policy has been prepared in response to the Code, and applies to all Retail products which we underwrite under binding authority from certain Underwriters at Lloyds.
We take a customer-centric approach to the design and distribution of our products. This includes factors such as:
- Designing insurance products that are likely to be consistent with the likely objectives, financial situation and needs of customers for who they are intended;
- Designing insurance products that are likely to deliver value for money, and
- Carefully choosing who we partner with to distribute our products.
Design
Our approach to the development of insurance products for appropriate target markets may include:
- Consultation with Lloyd’s Underwriters
- Employees with relevant industry sector and insurance product experience and knowledge.
- Robust testing of new products.
- Market research and feedback to assist us in understanding the likely objectives, financial situation and needs of customers including customers experiencing vulnerability.
- Analysing internal and external data (where available) such as claim ratios, claims paid, withdrawn and denied; policies sold; cancellation and the nature and number of complaints.
- Development of a Target Market Determination, for retail insurance products, that describes the class of consumers comprising the target market for the insurance product.
- Regular reviews of insurance products on offer and the Target Market Determination.
- Internal policies, procedures and training for our employees.
Distribution
We believe in the value of licenced insurance brokers and their ability to understand the objectives, financial situation and needs of their clients and to provide appropriate general and personal advice. They are well regulated, educated and customer-centric which compliments our approach. For this reason, we only distribute our products through selected insurance brokers.
We require a signed Terms of Business Agreement which clearly outlines the obligations that result in our insurance products reaching consumers in the appropriate target market.
Target Market Determinations (TMD)
From 5 October 2021, Edge will publish a TMD for each retail product. The TMD will be available on our website. We will do this to help our customers understand which of our products are more suited to them. The TMD will describe who a product is appropriate for and any conditions around how the product can be distributed. It also describes the events or circumstances where we may need to review the Target Market Determination for a product.