Compliance in General Insurance can be complex. Over the years I have developed Paul’s ‘Rules of Thumb’, to assist simplying compliance for my clients.
Naturally, when considering compliance arrangements the complete obligation needs to be considered however, the following can be adopted by front end staff as a mantra.
- Start with Codes – when designing compliance arrangements, start with the GI Code and/or Insurance Brokers Code. Codes go beyond the law and are customer friendly, the end result is a more dynamic and customer experience based compliance approach. It is still necessary to bring in financial service laws however starting with Codes assists in developing a customer centric approach to compliance.
- Align dislosures with the customer experience – aligned with Rule of Thumb 1, General Advice Warnings, FSG, PDS and many other obligations for Retail Clients have timing requirements (when to provide the notice or warning). Aligning these compliance requirements with the customer sales experience provides a more meaningful & contextual approach for front-end staff.
- APRA or ASIC– APRA is primarily focused on policyholder protection (carrying on insurance business in Australia) while ASIC is primarily concerned with consumer protection (carrying on a financial services business in Australia).
- Advice – when a sales person or distributor or broker or underwriter talks to a client/customer, assume they are providing advice.
- Cash Settlement Fact Sheet (CSFS) – If a PDS has been provided to a client, & that PDS states that claim settlement options include repair or replace, a CSFS will be required to be provided when settlement is to be via a cash settlement.
- An incident is where something has happened that wasn’t supposed to happen. The intention is for front-end staff to report as many incidents as possible. A trained person can then filter/triage as necessary.
- A complaint is where a customer is not satisfied with an outcome. The intention is for front-end staff to report as many complaints as possible. A trained person can then filter/triage as necessary.
- Commissions are an inherent conflict of interest, and must be managed accordingly through disclosure, control(s) or avoiding.
- Financial Service laws are technology-neutral, the obligation applies irrespective of whether performed by a human or technology (including AI).
- If in [compliance] doubt, speak to Paul.
The key theme from my ‘Rules of Thumb’ is to create simple, meaningful messages for front-end staff as a quick reminder of important compliance obligations. Engaging with customers and clients can be challenging with complex problems requiring a solution. Simple tips and messaging enables compliance to be part of the solution.