global insurance management

Proactive Regulatory Review Programme

Apr 29 2013

Proactive Regulatory Review programme

Relevance:                   All firms.

Action required:           Check that you would be able to provide the regulator with what they might request from you.

We have previously warned firms that the regulator – the FCA – is continuing its programme of contact with the firms it supervises.

The third element of the review process is referred to as “Follow Up” and one aspect of this is a “Verification Visit”.  Selected firms will be contacted in advance of the proposed date and asked to supply certain documents.  These will be reviewed against the answers that the firm supplied in the previous element, the “Regulatory Review interview”.

The FCA indicates that “not all firms will have follow-up work, but if you do this will take place soon after your review and will be either steps we’ve asked you to take, or checks by us to make sure our initial review was accurate.”

We are now able to share with firms the sort of information that the FCA will request:

  1. The firm’s organisation chart.
  2. A copy of your firm’s most recent assessments of risks to the firm (for example, gap analysis).
  3. Minutes of Board/management/staff meetings.
  4. A copy of your most recent compliance report.
  5. A copy of your most recent management information to include details of any trends identified and any action taken.
  6. A copy of the firm’s sales process.
  7. Copies of your disclosure document(s).
  8. The New Business Register (for the past 12 months).
  9. A copy of the firm's Training & Competence scheme and the training and competency records (to include details of monitoring and individual adviser performance assessments).
  10. A copy of the complaints procedures and the complaints register (for the past 24 months).
    1. Accounting Records.

The big question is: Would you be in a position to readily supply all items on the list?

From our involvement with client firms, we believe that most items would be available but one area that might be a cause for concern is that of Training and Competence (T&C).  We do undertake competence assessments for some firms but others have their own systems.

It would probably be beneficial for firms to review their position on T&C arrangements, not just in case they get the call from the FCA but because it is a fundamental issue that those you employ should be capable of doing the job they are employed to do.  In other words, you should have a process that allows your employees to attain and maintain the relevant knowledge, skills and expertise.

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