Approval Process of Life Insurance Products by The Central Bank of Trinidad and Tobago September 18...

Approval Process of Life Insurance ProductsApproval Process of Life Insurance Productsbyby

The Central Bank of Trinidad and TobagoThe Central Bank of Trinidad and Tobago

SeptemberSeptember 1818thth 2006 2006

Prepared by Marlon Marquis and Michelle AssingPrepared by Marlon Marquis and Michelle Assing

2CARTAC Workshop - September 18-21, 2006 Approval Process of Life Insurance Products by CBTT

September 18th 2006

OverviewOverview

• Regulatory Role in product approvals

• Approval process

• Questions ??


September 18th 2006

Regulatory Role in product approvalsRegulatory Role in product approvals

• Requirement of the Insurance Act (Main sections: 24, 117-124, 132-138)

• Opinion on form of policy/application/ endorsement– Must be in the public’s interest– Not fraudulent– Not unjust – Not imprudent (Proposed amendment to IA)

• Ensure that the rates are approved by the actuary• Protection of policyholders’ interests


September 18th 2006

Approval ProcessApproval Process

• Assessment • Assessment • Findings & Recommendations• Findings &

Recommendations

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• Initial Review• Initial Review


September 18th 2006

Initial ReviewInitial Review

• Review items against checklistPolicy ContractApplication FormActuarial CertificateReport by the Actuary

• Premium rates• Maximum commission rates• Maximum discount, if any

Marketing materialReinsurance TreatyBoard of Inland Revenue approval, if

product is a registered annuity


September 18th 2006


•R

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w

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IA

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p/h

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Recommendations•

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• Complete checklist

• Complete checklist


• Policy contract

• Application form

• Actuarial certificate

• Report by the Actuary

• Reinsurance treaty

• Marketing material


September 18th 2006

Assessment – Policy Contract/EndorsementAssessment – Policy Contract/Endorsement

• Review for completeness (All items referred to must be present)

• Contract wording must be clear – Avoid ambiguity or misleading information– Benefit provisions must be clearly communicated– Conditions and exclusions are not misleading

• Ensure that all terminology used is defined • Ensure consistency in use of words / terms • Check for accuracy

(Typographical and grammatical errors)

• Ensure compliance with the Insurance Act Examples:– Written proof of age is a condition precedent to the payment– Cannot void due to misstatement of age or incorrect statement unless

fraudulent or significant to the risks


September 18th 2006

Assessment – Application FormAssessment – Application Form

• Consistency with the policy contract

• Compliance with the Insurance Act – place and date of birth is required – if sold to minor must have consent of parent


September 18th 2006

Assessment - Actuarial CertificateAssessment - Actuarial Certificate

• Requirement of the IA– Rates must be approved by the actuary

• Ensure that the actuary is the appointed actuary on file at the CBTT


September 18th 2006

Assessment - Report by the ActuaryAssessment - Report by the Actuary

• Ensure that the product features are the same as those priced by the actuary

• Provides other useful information– Pricing assumptions– Risk profile of the product – Identify any guarantees on the product– Reservations by the actuary


September 18th 2006

Assessment - Marketing MaterialAssessment - Marketing Material

• Wording must be clear– Must not be misleading or ambiguous

• Must be accurate and consistent with product specifications


September 18th 2006

Assessment - ReinsuranceAssessment - Reinsurance

• Ensure consistency of the Report by the Actuary and the reinsurance treaty details

• Information on the company’s exposure


September 18th 2006


• Review for compliance with IA and benefit of p/holder

• Review for compliance with IA and benefit of p/holder

•P

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Pro

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Recommendations

• Completeness

• Consistency

• Clarity

• Accuracy

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ge

&

req

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• Policy contract







September 18th 2006

Assessment - Product ReviewAssessment - Product Review

• Description(Highlight major features)

• Compliance issues (Identify non compliance with the IA)

• Product risks(Identify significant risk exposures)

• Reinsurance (Synopsis of reinsurance arrangements)

• Summary of findings / recommendations


September 18th 2006


•R

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IA a

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efit

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p/h

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Recommendations

• Completeness

• Consistency

• Clarity

• Accuracy

•A

ckn

ow

led

ge

&

req

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t•

Ack

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& r

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• Policy contract






• Follow-up with company

• Concerns addressed

• Approval granted

• Description

• Compliance issues

• Product risks

• Reinsurance

• Summary


September 18th 2006

• Questions ??


September 18th 2006

Thank you!

Copies of this presentation

are available upon request:

[email protected]

Approval Process of Life Insurance Products by The Central Bank of Trinidad and Tobago September 18...

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