Chartered Insurance Institute R e g u l a t o r y U p d a t e 1 2 - - PowerPoint PPT Presentation

Chartered Insurance Institute

R e g u l a t o r y U p d a t e 1 2 N o v e m b e r 2 0 1 8

Regulatory Update

• FSA Update – Claire Whitelegg
• Developments in Insurance Regulation – Cheryl McGinley
• Developments under the Financial Services Act - Claire

Whitelegg

• Consumer outreach – Claire Whitelegg

FSA Update

• Board and Corporate Governance

– Recently issued Board Code of Conduct for members – Newly appointed General Counsel and Head of Corporate Governance – Two new Board members recently appointed by Tynwald and new Chair confirmed

• 1st Strategic plan near completion

– Key strategic themes and supporting Priority Projects – More clarity around operating principles and core values – Enhanced accountability through PP reporting

FSA Update

• Cross-industry issues:

– New Data system under development – MoneyVal action items

• 2nd version of AML returns launched

– FSA conference next week – New Fitness and Propriety regime came into effect August 1st

Strategic Themes 2018 - 2021

• Enhance the framework to protect consumers and deter

financial crime

• Enhance clarity around our regulatory, supervisory and

enforcement processes

• Encourage innovation and continuous improvement
• Create an environment that enables staff to fulfil their

potential

Ongoing FSA priorities in support

• f our Strategic Themes
• Supervisory methodology
• Bank Recovery and Resolution
• Insurance Core Principles project
• Life Insurance Compensation Scheme
• Retirement Benefits Scheme Reform
• Industry Survey and Ongoing engagement
• Credit Union Secondary legislation

Developments in Insurance Regulation

Current status

• Per sector (life insurance; non-life insurance; general

insurance intermediaries) Next steps

• Per sector (life insurance; non-life insurance; general

insurance intermediaries)

Current Status – life insurance

• Risk-based capital framework implemented from 30

June 2018

• Conduct of Business Code issued to come into force on

1 January 2019

• Corporate Governance Code of Practice for Commercial

Insurers issued to come into force on 1 January 2019

Current Status – non-life insurance

• QIS5 exercise completed on 31 October 2018 (3rd

exercise for this sector)

• Conduct of Business Code issued to come into force on

1 January 2019

• Corporate Governance Code of Practice for Commercial

Insurers issued to come into force on 1 January 2019

Current Status – general insurance intermediaries

• Consultation on general and conduct of business

requirements - mid 2017; feedback issued in April 2018

• Survey for businesses selling insurance alongside other

goods and services - January/February 2018

• Insurance intermediation – exemptions from

registration and cross-border business issued for consultation - April 2018

• Corporate Governance Code of Practice for General

Insurance Business intermediaries issued for consultation - November 2018

Life insurance – next steps

• Group supervision – regulations to come into force on 1

July 2019

• Public disclosure – discussion paper to be issued by the

end of 2018

• Additional reporting requirements to be issued for

consultation by end of 2018

Life insurance – solvency II equivalence

• Equivalence process uncertain
• Continued objective to have a framework capable of

the positive Solvency II equivalence assessment

• Continue to liaise with IOM Brussels Office
• Plan to engage with UK PRA

Non-life insurance – next steps

• Further consultation following review of QIS5 results
• Further consultation on Corporate Governance Code of

practice for non-commercial insurers

• Public disclosure discussion paper to be issued by the end of

2018

• Agreement on how to define a captive for the purpose of all

the above requirements

• Additional reporting requirements to be issued for

consultation by end of 2018

General insurance intermediaries – next steps

• Consolidation of all applicable legislation into

consultation –mid 2019

• Implementation – end 2019?

Looking forward – Consultations

Public disclosure Life and non-life End 2018 Additional reporting Life and non-life End 2018 CGC Non-life non commercial Q2 2019 Regulations for capital framework Non-life Q3 2019? Consolidated legislation General insurance intermediaries Mid 2019

Looking forward – Implementation

Conduct of Business Codes Life and non-life 1 January 2019 Corporate Governance Code of Practice for commercial insurers Life and non-life 1 January 2019 Additional reporting requirements Life and non-life Q3 2019? Intermediary requirements General business Q4 2019? Corporate Governance Code of Practice Non-life 1 January 2020 Risk based capital Non-life 30 June 2020

Developments Under the Financial Services Act

• Client Asset Reports
• Cyber Risks
• Pension Transfers Guidance
• Wealth Management Forum

Client Asset Reports

• Overall good quality most identify >1 improvement area
• Auditor Exception logs - exceptions:
• not automatically action or breach
• best practice points
• include unresolved issues (licenceholder and auditor)
• First 50 CARs, Auditor review frequency:
• 20% at High frequency (annual)
• 50% at Medium frequency (every 2 years)
• 30% at Low frequency (every 3 years)
• Q4 2018 - Guidance/ feedback on the Year 1 submissions:
• Constructive feedback welcomed

Dealing with cyber attacks

• Significant risk area
• Promptly notify the Authority of any serious or

significant incident involving data loss, financial loss, disruption to services or denial of services type attacks

• FSA Guidance December 2016

https://www.iomfsa.im/media/1694/141216finalisedgu idancecyberse1.pdf

Upgrade to Pension Transfer Guidance

• Working Group set up with Financial Planners and

Insurance Brokers Association

• Draft guidance being prepared with the Working Group

for discussion with industry

Wealth Management Forum

• NEW Wealth Management Forum
• investment management community
• coverage may include
• international and market developments
• specific guidance and rule book amendments
• technological developments
• cyber risks
• business challenges
• invitations issued 7 November 2018
• initial meeting being scheduled

Consumer awareness

Pension Matters Pension survey (Results published 2 Oct 2018) World Investor Week 2018

• Publicity
• Events
• New literature
• Short films

New Consumer area of the FSA Website

Demographic

The full survey and info graphic and equivalent UK surveys can be found at: https://www.iomfsa.im/fsa-news/2018/oct/isle-of-man-pension- matters-what-are-manx-attitudes-to-pension-planning/

UK equivalent was 46%

World Investor Week

9 Key Messages for Smart Investors

World Investor Week

5 Key Messages for Smart Investors re Crypto and ICOs

New Consumer Literature

New Consumer Literature

Consumer awareness

Work with Ballakermeen High School

• LIBF Certificate in Financial Education
• Equivalent to an A/S level
• 22 Students pass including 1 A and 3 B grade’s
• ICO Consumer Guidance – developed with students