Episode 04: How to successfully implement change in your legal department
Implementing change can be challenging, especially when some people are resistant to new ways of working.
The International Association of Insurance Supervisors (IAIS) has recently published a revised assessment methodology to identify whether a firm is a globally systemically important insurer (G-SII). The 2016 Methodology outlines a five-phase approach to the G-SII assessment process that includes fact-based qualitative and quantitative elements in the process for determining whether a firm can be categorised as a G-SII.
Alongside the new methodology the IAIS has published a revised approach to identifying activities that might pose a systemic risk to the financial system. The ‘non-traditional’ insurance approach is revised and replaced by a more nuanced assessment of specific product features and their ability to drive systemic risks. In particular the paper now published takes into account the correlation between particular product features and the broader economy.
For further information: IAIS introduce a five phase assessment methodology to identify G-SIIs
The European Insurance and Occupational Pensions Authority (EIOPA) has published for consultation technical advice on the content of delegated acts concerning the Insurance Distribution Directive (IDD). If the advice of EIOPA is followed, the contents of this consultation paper would form the basis of secondary legislation in which much of the detail of the new distribution regime would be contained. EIOPA sees the IDD and its secondary legislation as contributing to the creation of a single rulebook on consumer protection for insurance products.
On 24 February 2016, EIOPA received a formal request for advice from the European Commission to provide technical advice on delegated acts to provide detail in relation to the following articles in the IDD:
The technical advice covers each of the above aspects of the IDD. Although EIOPA has already undertaken extensive work on product governance (in particular producing Preparatory Guidelines on product oversight and governance arrangements by insurance undertakings and insurance distributors), new policy proposals have been included in this latest advice. Of particular interest are the new proposals that seek to provide guidance on when an intermediary or insurance undertaking will be acting as ‘manufacturer’, the granularity needed to identify a target market and product review and information arrangements.
The remaining areas of the consultation concern insurance-based investment products.
The consultation on the technical advice will run until 3 October 2016. A public hearing will take place in Frankfurt on 23 September 2016.
On 12 July 2016, the Organisation for Economic Co-operation and Development (OECD) published a draft recommendation of the Council on Guidelines on Insurer Governance for online public consultation.
The draft recommendation is aimed at revising the May 2011 revised OECD Guidelines on Insurer Governance and complements the G20/OECD Principles of Corporate Governance which were published in September 2015.
The guidelines are organised around four main sections: governance and structure; internal governance mechanisms; groups and conglomerates; and stakeholder protection. The draft recommendations include the following changes to the May 2011 Guidelines:
The guidelines are non-binding and are intended to provide guidance and serve as a reference point for policymakers, insurers and other relevant stakeholders. The OECD warns that the draft is a work in progress and so the content may be subject to modification.
The deadline for comments on the draft is 29 August 2016.
For further information: OECD publishes draft recommendation on OECD Guidelines on Insurer Governance
On June 22, 2022 the Financial Reporting Council (FRC) published a consultation document seeking views on publicly available audit quality indicators (AQIs) to drive audit quality improvements.
A number of enforcement actions taken by regulators around the world have been a reminder for financial institutions that board involvement in, and appropriate oversight of, anti-money laundering/countering the financing of terrorism (AML/CFT) compliance programmes is critical.
© Norton Rose Fulbright LLP 2022