While it is not the primary responsibility of a systems engineer to create IT policies, they may have experience contributing to these, either by helping to develop them, educating the business users, or enforcing them. The interviewer will be curious about your involvement in policy creation and may be looking for you to contribute to new IT policies in their organization, especially if the company is small. You need to be honest about your experience with this so that your skills in this area match the responsibilities if you are hired for this position.