I’ve been sorting out banking & accounting issues. While frustrating, & taking me away from my client work, I appreciate that as a small business owner such work is necessary. Without banking & accounting my business simply can’t function.
I appreciate that many people see compliance in the same way. Frustrating & time-consuming, however a necessity for the business. Unfortunately, this approach can diminish the importance of compliance & not truly embed compliance within the business & each role.
The purpose of compliance is to protect – your business, clients, people & partners.
Think about how important your car is to you. Yes, you can arrange for other, more skilled people to service the car & attend to repairs & the like however, you have accountability to ensure the car is roadworthy & that you know the road rules. You can outsource certain tasks that require a specialist skill set however, at the end of the day, you are accountable for your car when you drive it on a public road.
Compliance is no different.
The FAR regime [for insurers] creates the concept of Accountable Persons & [for enhanced entities] the requirement for Accountability maps.
These concepts are sound & can be scaled down & tailored to a business of any size so that compliance is role-based & part of day-to-day business activities.
Let’s see how this works for underwriting agencies, Insurance claim managers & Insurance brokers [& insurers].
𝘾𝙤𝙢𝙥𝙡𝙞𝙖𝙣𝙘𝙚 𝙖𝙘𝙘𝙤𝙪𝙣𝙩𝙖𝙗𝙞𝙡𝙞𝙩𝙮 𝙖𝙨 𝙥𝙖𝙧𝙩 𝙤𝙛 𝙮𝙤𝙪𝙧 𝙗𝙪𝙨𝙞𝙣𝙚𝙨𝙨 𝙧𝙤𝙡𝙚
1. Ensure that your risk & compliance manual includes an obligation table or you have a stand-alone register. This simply captures your AFSL, Code & other obligations at an operational level;
2. For each business leader/manager identify the obligations that fall within their area of business responsibility (sales, underwriting, claims, finance). Each manager now has their own compliance plan;
3. Assign key controls to each of the obligations. This ensures the obligation is being managed;
4. Periodically (at least annually), each manager tests the control(s) to ensure it is designed & operating effectively;
5. Each manager receives complaints, incidents, QA & other data, for their area, to validate the control testing results;
6. The manager oversights action plans to rectify any control that is ineffective
7. The manager provides reporting for their area that is consolidated into an enterprise report.
𝘼𝙘𝙘𝙤𝙪𝙣𝙩𝙖𝙗𝙞𝙡𝙞𝙩𝙮 𝙛𝙤𝙧 𝙘𝙤𝙢𝙥𝙡𝙞𝙖𝙣𝙘𝙚 𝙞𝙨 𝙥𝙖𝙧𝙩 𝙤𝙛 𝙮𝙤𝙪𝙧 𝙧𝙤𝙡𝙚
Adopting a systematic approach to compliance within each business area of responsibility & accountability will ensure that compliance is something that is done as part of each role.
If you need assistance in setting up compliance arrangements that work for you, provide business value & protect your business, people, customers, partners & YOU, contact me.