The insurer should have the competencies necessary to manage the instruments it is investing in. For complex investment activities (including underwriting guarantees for such complex securities) robust models of risks that consider all relevant variables may be needed. It is the insurer’s responsibility to ensure that the internal expertise and competence necessary are in place at all levels of the organisation to manage these risks effectively including the expertise to apply and vet any models used and to assess them against market convention. Also, an insurer needs explicit procedures to evaluate hidden and non-standard risks associated with complex structured products, especially new forms of concentration risk that may not be obvious.