Counterparty risk management describes the activities included in researching and onboarding new distribution partners, issuing TOBAs and other documentation, managing relationships once formed, but importantly, continually monitoring legal and regulatory risk throughout the lifecycle of the relationship. It requires a lot of skills, resources and time.
Though many businesses may feel that a one-time check when a distributor is onboarded, it's about more than that. Risks change over time and the potential for regulatory failure is significantly increased if a business doesn't stay on top of them. Streamlining this through automation ensures that insurance businesses can be proactive in managing their distribution channel relationships and simplify the way that they meet legal and regulatory obligations.