The Food Safety Modernization Act (FSMA) was signed into law in 2011 in order to better protect public health by strengthening the food safety system. This law has enabled the Food and Drug Administration to focus more on preventing food safety problems rather than reacting to problems after they occur – improving food safety standards by changing both industry’s and government’s approach to food safety from reactive to preventive, and helping avoid illness and injury in both humans and animals. Because dietary supplements and nutraceutical products are typically ingested, they are considered a food product, making them subject to many of the provisions in this law.
With so many entrepreneurs interested in starting supplement businesses, and so many rules and regulations to be aware of, many supplement manufacturers and importers may often feel overwhelmed and wonder if and how all of the rules apply to them. FSMA requirements can be complex, as different guidelines or exemptions may apply depending on the size of the business, the size of their suppliers’ businesses, where those suppliers are located, and what types of products are being produced.
As an insurance broker who is aware of these regulations, you can help clients avoid fines, lawsuits, recalls, and other actions that may hurt their business, while ensuring they get the best possible insurance terms and pricing.
So what do you as a broker need to know about FSMA to help guide your clients?
It All Starts With A Food Safety Plan
Under FSMA, manufacturers of dietary supplements and nutraceuticals must have a Food Safety Plan, which starts with a hazard analysis that identifies any known or reasonably foreseeable biological, chemical, and physical hazards. Once these hazards are identified, a plan must be written and implemented that includes preventive controls and corrective actions. These generally include:
- Process controls like cooking and refrigeration that can prevent or remove hazards.
- Food allergen controls that prevent cross-contamination with products that may contain known allergens; and ensure proper labeling and traceability
- Sanitary controls that minimize or prevent hazards such as environmental pathogens
- A supply chain program to minimize the risk of hazards in raw materials and other ingredients throughout the manufacturing process
- Monitoring and verification processes to ensure potential hazards do not make their way into the products
- Corrective actions to address any shortcomings in the Food Safety Plan, and recall products if necessary
Do You Know the FSMA Alphabet? HACCP, HARPC and cGMP
When creating or reviewing a food safety plan, you’ll probably come across a lot of acronyms, such as HACCP, HARPC and cGMP.
HACCP is the Hazard Analysis and Critical Control Point, and cGMP stands for current Good Manufacturing Practices. Together, these are designed to ensure that food is manufactured, processed, packaged and stored in sanitary conditions to prevent post-process contamination.
HARPC stands for Hazard Analysis and Risk-Based Preventive Controls, and is a key element of any food safety plan. The FDA requires every facility that handles food products, including dietary supplement and nutraceutical manufacturers, to have a HARPC plan that conforms to FDA standards and definitions regarding adulteration of foods, hazards, controls, and facilities, which must be properly documented and constantly reviewed.
The FDA has established science-based standards for conducting hazard analyses that manufacturers must follow, as well as standards for implementing and documenting preventive controls as part of a HARPC plan. This ensures manufacturers are meeting FDA screening guidelines to identify potential risks or threats to the food supply and implement appropriate corrective actions proactively to prevent contamination.
Foreign Supplier Verification Program: What Importers Need to Know
Fully implemented as of 2018, the Foreign Supplier Verification Program (FSVP) requires foreign suppliers to have a similar Food Safety Plan in place as domestic suppliers. FSVP requires U.S. importers to verify that their foreign suppliers are producing quality food that is not adulterated, using manufacturing processes that are in compliance with current good manufacturing practices and that meet the required preventive control standards to include traceability and labeling relating to allergens.
FSVP inspections will typically involve a review of records, rather than direct observations of food production, raw material, or ingredients. While some inspections can take place at the importer’s business location, FDA can also request the importer to provide FSVP records to FDA electronically. A review of these records will help identify any deficiencies or quality deviations.
In most cases, importers will not need to send the FDA these records unless requested, but they are required to keep detailed records on hand to confirm foreign suppliers meet FSMA standards. The FDA may review these records during a facility inspection, or they may request for these records to be sent electronically as mentioned earlier.
The Role of a Preventive Controls Qualified Individual
Every company that imports raw ingredients from foreign sources should have a Preventive Controls Qualified Individual (PCQI) either on staff, or as a contractor. This individual has been certified in food safety protocols, and can assess whether foreign suppliers meet FSMA standards, either by reviewing the suppliers’ safety practices and product testing themselves, or by having an independent third party conduct a review. There is a detailed scoring system that helps determine if a foreign supplier meets FSMA safety standards. Any foreign supplier that does not meet these standards, of course, creates a risk exposure, which is important for both underwriters and brokers.
Admiral Expert Underwriters on Your Side
All these regulations are highly complex and carry numerous exemptions. Different ingredients and manufacturing processes used to make dietary supplements can present various types of exposures to your customer. That’s why it’s so important to have an underwriter who is familiar with FSMA, who can help you assess your clients’ exposure, as well as help them mitigate their exposure.
If you are a wholesale broker in need of an insurance partner with deep expertise in the dietary supplement and nutraceutical industry, contact us to become an appointed broker. If you are a retail agent or broker with clients in these industries, we encourage you to connect with one of our wholesale broker partners.
Products and services are provided by one or more insurance company subsidiaries of W. R. Berkley Corporation. Not all products and services are available in every jurisdiction, and the precise coverage afforded by any insurer is subject to the actual terms and conditions of the policies as issued. Certain coverages may be provided through surplus lines insurance company subsidiaries of W. R. Berkley Corporation through licensed surplus lines brokers. Surplus lines insurers do not generally participate in state guaranty funds and insureds are therefore not protected by such funds.