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 • 1 st 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 2 nd version of AML returns launched • – FSA conference next week – New Fitness and Propriety regime came into effect August 1 st
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 of 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 (3 rd 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 Q2 2019 commercial Regulations for capital Non-life Q3 2019? framework Consolidated General insurance Mid 2019 legislation intermediaries
Looking forward – Implementation Conduct of Business Life and non-life 1 January 2019 Codes Corporate Governance Life and non-life 1 January 2019 Code of Practice for commercial insurers Additional reporting Life and non-life Q3 2019? requirements Intermediary General business Q4 2019? requirements Corporate Governance Non-life 1 January 2020 Code of Practice 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
UK equivalent was 46% 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/
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 •
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