Insurers face more intrusive supervision and early intervention, according to a report on global regulation.

Regulators are stating their expectations on new product design and insurers will be expected to conform, KPMG says in its paper Evolving Insurance Regulation – A New Dawn.

“Insurers should have a clearly documented and robust process in place [for product design], be able to show how it is used and demonstrate appropriate governance,” it says. “It is expected supervisors will become more intrusive in this area.”

Current products will not escape scrutiny, according to KPMG.

“There is an expectation supervisors will continue to challenge the suitability of… products sold in the sector, particularly where such products are very profitable. There are clear advantages of firms being proactive on this topic.”

Distribution and sales force quality are other key areas for scrutiny; the Australian Securities and Investments Commission (ASIC) has not hesitated to withdraw licences and ban organisations over such matters.

Sales staff remuneration may also come under the spotlight, KPMG predicts. The matter has already been tackled by ASIC with its guidelines on conflicted remuneration, and the regulator has warned there is more to come.

One area that has escaped closer scrutiny from Australian regulators is post-sales procedures.

“Supervisors will increasingly consider post-sales activity a key component of the wider ‘treating customers fairly’ agenda,” the KPMG report says. “Insurers will need to incorporate such analysis into their risk management actions.”

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