CPD Seminars July 2018 Compliance Update Linda Doyle Items - - PowerPoint PPT Presentation

Brokers Ireland CPD Seminars

July 2018

Compliance Update

Linda Doyle

Items Covered

• Update on transposition of Insurance Distribution Directive (IDD)
• Minimum Competency Code 2017 and Statutory Instrument 391
• f 2017
• General Data Protection Regulations /Data Protection Act 2018

Update on transposition of Insurance Distribution Directive (IDD)

Update on transposition of Insurance Distribution Directive (IDD)

• Transposition date of the Insurance Distribution Directive is 1 July

2018.

• Application date is 1 October 2018.
• The Department of Finance has confirmed its transposition is

faithful to the Directive with only a few enhanced provisions.

• Good news for us. Many of the requirements are already in place

in Ireland such as the minimum competency requirements.

5

Insurance Based investment Products (IBIPs) Restriction on the use of the term “Independent”

• Must assess a sufficiently large number of insurance products

available on the market.

• Sufficiently diversified with regard to their type and product

providers

• Not to be limited to insurance products issued or provided by

entities having close links with the intermediary. Brokers Ireland will be issuing a revised Terms of Business Template to reflect changes later in the Summer.

6

IBIPs (Chapter 6) – Additional Requirements

Information to Customers prior to conclusion of contract:

• Periodic assessment of the suitability of the recommended IBIP
• Warnings of the risks associated with the IBIP
• Information relating to the distribution of the IBIP including the

cost of advice, the cost of the IBIP, and how the customer may pay for it, (also include third party payments)

• The information provided must allow the customer to understand

the overall cost, as well as the cumulative effect on the return of the investment, and where the customer requests, the breakdown

• f the costs.

7

Assessment of Suitability - IBIP

• When providing advice, the intermediary must obtain the

necessary information regarding ➢ the customers knowledge and experience, ➢ their financial situation, ➢ their ability to bear losses, ➢ investment objectives and risk tolerance

• so as to enable the intermediary to recommend the IBIP that is

suitable for that person.

8

Appropriateness and Reporting to Customers

• Where the intermediary considers that the product is not

appropriate the intermediary must warn the customer to that

• effect. This warning must be provided in a standardised format.
• Where the customer does not provide the information required,
• r it is insufficient, regarding their customers knowledge and

experience, their financial situation, the ability to bear losses, investment objectives and risk tolerance, the intermediary must warn them it is not in a position to determine whether the product is appropriate for them. This must be provided in a standardised format.

Additional Requirements as per Chapter VI – but already in place as per the CPC

• The intermediary must maintain a record of his dealings with the

customer.

• Must include the documents agreed between the intermediary

and the customer that set out the rights and obligations of the parties.

• The intermediary must provide the customer, prior to the

conclusion of the contract, with a Suitability Statement.

Insurance Product Information Document

• To be drawn up by the manufacturer of the insurance product .i.e.

the insurer or wholesale broker.

• To follow a standardised format – to include information about the

product, summer of cover, means of payment of premium and duration, exclusions, obligations, term of the contract, and means

• f terminating the contract.
• Allows customer to make an informed decision, while taking into

account the complexity of the insurance and type of customer.

• EIOPA drafted standardised template.

Self-Employed Agents

• Under the Insurance Mediation Regulation 2005, self-employed

agents have to be registered in their own right.

• However, under IDD, an insurance intermediary may be registered

by another insurance intermediary, undertaking or association under the supervision of the Central Bank.

• However, this is at the discretion of the Department of Finance.
• Brokers Ireland have asked the Department of Finance to avail of

this discretion. Indications so far is that they will.

• The registering intermediary would be fully responsible for the

intermediary its registering.

• If you are appointing a self-employed agent, beware the revenue
• implications. (Also bear in mind - IIA tied agent requirements)

Approved Professional Bodies

• Indications are that the Central Bank will be the competent

authority for the Approved Professional Bodies as distributors of insurance products.

• Accountants will no longer be regulated by their professional body

for investment services.

• Level playing field

Minimum Competency Code 2017 and Statutory Instrument 391 of 2017

• New requirements since January 2018
• All staff (that are offering advice or arranging a financial service)

must fall into one of the following categories:- ➢ Be a qualified person. ➢ Be a Grandfathered person. ➢ Be a new entrant and is working towards a recognised qualification.

Minimum Competency Code 2017 and Statutory Instrument 391 of 2017

Obligations of the Employer

• Employers must maintain a Register of all accredited persons (i.e.

qualified and grandfathered persons and new entrants). Each branch must maintain their own Register.

• A person who has had their professional designation removed due

to failure to comply with the relevant CPD requirements must be removed from the Register.

Obligations of the Employer - continued

• A person who is grandfathered or qualified who has failed to

complete the 15 hours of CPD more than once in any five year period must be removed from the Register.

• A person who has not met their CPD requirements and has been

removed from the Register, but meets the Fitness & Probity Standards, must be restored promptly once he or she is again in compliance with the CPD requirements.

General Requirements to ensure appropriate competence and skills

• You must ensure that each person subject to the Minimum

Competency Code performing a relevant function on your behalf has obtained the competence and skills appropriate to the relevant function through experience, or training.

Firms must carry out an internal annual review of the following:

• Qualifications of all staff which are subject to the Minimum

Competency Code to ensure that the qualification held by the staff member is appropriate to the staff member’s function being carried out.

• The development and experience needs of staff who are subject

to the Minimum Competency Code taking into account regulatory developments and any new retail financial products you may be

• ffering.

Firms must carry out an internal annual review of the following (continued):

• Where you issue a Certificate of Competency, you must maintain

a record of the certificate issued and carry out an annual review to ensure the certificates are accurate and up to date.

• Your internal policies and procedures to ensure that staff,

understand and apply these policies and procedures (in respect

• f MCC).
• Check staff are completing their required number of CPD hours.

The first check to be completed before 1 October and follow up thereafter if number of hours is deficient.

Approval of online processes

• If you are providing services on an online platform you must ensure

➢ that the process for the selection of products and ➢ any advice or information provided on foot of that selection process is approved in writing by a person who has one or more recognised qualification, or is a grandfathered person, in respect of the function being exercised.

Retention of Records

You must maintain

• Records to evidence compliance with ‘Prescribed Script Function’

requirements.

• Records in respect of CPD requirements
• Records of all monitoring which you carried out on your staff’s compliance

with the Minimum Competency Code.

• Records which demonstrate your staff’s compliance with the CPD

requirements.

• Records of all breaches of the CPD requirements.
• Records in relation to any pro-rata adjustments including

➢ The extent of the adjustment, ➢ The reason for the adjustment, and ➢ Where appropriate, medical certification of illness.

• Any other relevant information.

Retention of Records

You must establish and maintain a register which shall record information in respect of an accredited person for whom you are responsible.

• Name of the accredited person
• Qualification, grandfathered status, transitional status, new entrant, or

prescribed script function

• The relevant function and related retail financial product in respect of which

the person is accredited

• The date the person obtained a recognised qualification and completed the

relevant experience, or was grandfathered

• If the person is a new entrant;

➢ The date of commencement of the function, and ➢ The qualification being pursued.

Retention of Records

• You must provide a Statement of Grandfathering Status to a

grandfathered person when that person ceases employment with you, or at any other time at the request of the grandfathered person, and keep a record of it.

• You must retain all records and documentation necessary to

create and confirm the content of each Statement of Grandfathered Status provided.

Retention of Records

• You must provide a consumer, on request, with a Certificate of Competency
• n your headed paper, confirming that a person performing a relevant

function meets the standards set out in the Minimum Competency Code.

• This certificate must be signed by the appropriate person as decided by the

Compliance Officer.

• You must maintain a record of all Certificates of Competency issued, and

carry out an annual review to ensure they are accurate and up to date.

• You must ensure written records are maintained in respect of new entrants

detailing their training, qualifications being sought, length of initial period under supervision, incremental reduction in supervision, assessments, and records of meetings between supervisor and new entrant.

New Entrants to the Financial Services Industry

• Must be supervised by a person, who is a qualified person or a grandfathered

person in respect of the particular function being carried out by the new

• entrant. Supervision must be evidenced.
• Must be accompanied at all times during the initial period.
• Carry out regular assessments. First one within two months. Detail nature

and complexity of function, quality of advice, compliance with requirements, complaints received in respect of that person and their ethics and behaviour. Document the assessments.

• Exam Plan - All ‘new entrants’ to sit next available exam. Must attain the

qualification within four years. Retain records. Document each instance in which a new entrant does not avail of an opportunity to sit an exam and the reason for same.

• Supervision can incrementally be reduced. Rationale behind decision to be

recorded in assessment/s.

Mortgage Credit Intermediaries Board of Directors/Partners

• Non-Executive Directors must also complete 6 hours of CPD per

calendar year.

• Includes partners in partnerships.
• One hour must relate to Ethics.
• Surplus hours in one year may not be carried over to the

following year.

• This requirement is for all members of the board even if they are

not advising. If the individual already holds a recognised qualification and is completing CPD, there is no additional requirement.

Mortgage Advisors

• All grandfathered mortgage advisors to be qualified by March

2019.

• Limited time to attain qualification between now and then.
• Must register for next available sitting.

GDPR – What you need to do

GDPR – What you need to do

• Refer to our guidance documents and Templates on the

member section of our website ➢ www.brokersireland.ie

• At a minimum you must have in place:

➢ Updated Terms of Business document ➢ Privacy Notice ➢ Data Protection Policy ➢ Retention Policy ➢ Training of staff ➢ Data Protection contact point within the firm

GDPR – Data Protection Officer (DPO)

• The indications are that a vast majority of brokers will not require a DPO. To

aid in that decision use the Checklist for assessing if a DPO is required. Checklist is on our website.

• If you decide you do, you must inform the Data Protection Commission and

provide the DPO’s contact details.

• The DPO’s contact details to be made available on the Data Privacy Notice.
• You must ensure that your DPO has sufficient expert knowledge of the law

and the practice of protection of personal data. May appoint an external DPO.

• If you decide you do not require a DPO ensure you have a contact

person/unit within your organisation to deal with data protection queries, from staff or data subjects. Include their contact details on your Data Privacy

• Notice. Can use a generic email address e.g. dataprotection@ABCLtd.ie

Any Questions?