๐— ๐—ฎ๐—ป๐—ฎ๐—ด๐—ถ๐—ป๐—ด ๐˜๐—ต๐—ฒ ๐—ฐ๐—ผ๐—บ๐—ฝ๐—น๐—ฒ๐˜…๐—ถ๐˜๐˜† ๐—ผ๐—ณ ๐—ฐ๐—ผ๐—บ๐—ฝ๐—น๐—ถ๐—ฎ๐—ป๐—ฐ๐—ฒ ๐—ถ๐—ป ๐—ด๐—ฒ๐—ป๐—ฒ๐—ฟ๐—ฎ๐—น ๐—ถ๐—ป๐˜€๐˜‚๐—ฟ๐—ฎ๐—ป๐—ฐ๐—ฒ

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  • ๐— ๐—ฎ๐—ป๐—ฎ๐—ด๐—ถ๐—ป๐—ด ๐˜๐—ต๐—ฒ ๐—ฐ๐—ผ๐—บ๐—ฝ๐—น๐—ฒ๐˜…๐—ถ๐˜๐˜† ๐—ผ๐—ณ ๐—ฐ๐—ผ๐—บ๐—ฝ๐—น๐—ถ๐—ฎ๐—ป๐—ฐ๐—ฒ ๐—ถ๐—ป ๐—ด๐—ฒ๐—ป๐—ฒ๐—ฟ๐—ฎ๐—น ๐—ถ๐—ป๐˜€๐˜‚๐—ฟ๐—ฎ๐—ป๐—ฐ๐—ฒ

I was chatting to some Lloyd’s underwriters last night & they mentioned the complexity of the Australian regulatory landscape for general insurance.

I agree that the landscape is complex however, I also made the point, of how a systematic approach to compliance enables that complexity to be adequately managed.

๐˜ผ ๐™จ๐™ฎ๐™จ๐™ฉ๐™š๐™ข๐™–๐™ฉ๐™ž๐™˜ ๐™–๐™ฅ๐™ฅ๐™ง๐™ค๐™–๐™˜๐™ ๐™ฉ๐™ค ๐˜พ๐™ค๐™ข๐™ฅ๐™ก๐™ž๐™–๐™ฃ๐™˜๐™š

  1. Identify the sources of your obligations. Obligations will arise from (i) what you do (& the licences & authorisations you need/hold); different obligations apply to insurers, Underwriting Agencies, brokers & TPAs & (ii) how you provide your services e.g., different distribution channels & use of claim service suppliers
  2. Record your material obligations. Larger firms may do this through a stand-alone register while smaller firms should incorporate it within their risk & compliance manual
  3. Adopt a risk appetite statement (RAS) position for regulatory/compliance risk.
  4. Assign key control(s) to each obligation until the obligation is within your RAS.
  5. Periodically test the control to ensure that it is designed effectively & operating effectively. Take action to close out any identified gaps
  6. Train your people (& ARs) on how compliance protects, the importance of a systemic approach to compliance & their role in control testing & self-reporting by promptly identifying & reporting incidents, breaches & complaints
  7. Use data generated by the systematic approach to compliance (incidents, breaches, complaints, self-reports, file reviews, QA etc) to validate the control test results & to report breaches to regulators or Code committees
  8. Use external information such as regulatory/Code reviews, ASIC letters, Court cases, regulator speeches & media releases & the like to question ‘could this happen to us?’ or ‘How are we managing this?’
  9. Report the control test results & data & external information to your risk & compliance committee. The data should be analysed, connections & insights provided & decisions made.
  10. Incorporate regulatory change mechanisms into your systematic approach.
  11. Use the data that the systematic approach generates as a continuous improvement mechanism so that compliance continues to protect & adds value to your business.

๐™‚๐™š๐™ฃ๐™š๐™ง๐™–๐™ก ๐™ž๐™ฃ๐™จ๐™ช๐™ง๐™–๐™ฃ๐™˜๐™š ๐™ž๐™จ ๐™˜๐™ค๐™ข๐™ฅ๐™ก๐™š๐™ญ

A systematic approach to compliance results in an ecosystem that continually evolves to respond to & manage the risks associated with business growth & regulatory change & increasing complexity.

The regulatory landscape for general insurance is complex. However, a systematic approach to compliance enables this complexity to be understood & managed in a way that protects your business, people, customers & stakeholders.