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The requirement of CPS 230 for general insurers is that they must effectively manage operational risks, maintain critical operations through disruptions, and manage the risks arising from service providers. It’s the latter requirement that has caused recent tension, with APRA expressing concern with Insurers use of Underwriting Agencies, reminding insurers that they can outsource critical underwriting & claims functions, but not accountability. Underwriting Agencies as an AFS Licensee It’s all well & good for insurers to impose their requirements on agencies (& rightly so, to a degree) however, among all this, it should be remembered that an Agency who holds an AFSL must comply with its obligations or face severe consequences including reputational harm & civil penalties. Somewhat ironically this may potentially also ‘severly disrupt’ the insurer’s operations. An Agency, holding an AFSL must have adequate risk management systems. The requirement for risk management systems ensures that agencies explicitly identify the risks they face and have measures in place to keep those risks to an acceptable minimum. This requirement sounds remarkably similar to the CPS 230 requirement on insurers. Therein lies the answer ( lightbulb moment – I feel like a ‘tahdah’ is warranted at this point), the insurer meets its CPS 230 requirement to manage the risks arising from material service providers and the agency meets its AFSL obligation to have an adequate risk management system & manage its own risks. ASIC (in RG 104) states that a licensee’s risk management systems will depend on the nature, scale and complexity of its business and risk profile. ASIC also states that the licensee’s risk management systems will need to adapt as their business develops and business risk profile changes over time. This would include enhancing the agency’s risk management system to enable it to meet the risk of their binder agreement being terminated. Taking a step back, an insurer would eventually terminate the agencies binder agreement if they presented an unmanageable CPS 230 risk (or any risk for that matter including in respect of CPS 234 Security Information). What does an adequate risk management system look like for an insurance Underwriting Agency? The risk management system must not only cover the risks of the Agency but also, any of its representatives (such as authorised reps or distributors acting under an ASIC instrument). Risk management components: A risk identification (risk profiling) brainstorming session including relevant stakeholders (potentially the insurer(s)) assists in identifying material risks to the business; to ensure nothing is missed, risks are catergorised. CPS 230 provides assistance defining operational risk as legal risk, regulatory risk, compliance risk, conduct risk, technology risk, data risk and change management risk. To this you would add strategic/reputational risk and financial risk. Risk appetite statement (RAS) – a board/senior management approved RAS is critical to define the amount of risk the Underwriting agency is willing to accept in pursuit of its objectives, expressed against each risk category. This can be a simple 1 pager for a typical Underwriting Agency. Risks should be recorded in […]

One of the compliance services that I provide is a fit-for-purpose & tailored risk & compliance manual All Manuals are personally designed by myself. 𝙏𝙝𝙚 𝙗𝙚𝙣𝙚𝙛𝙞𝙩𝙨 – governance, risk & compliance is maintained in a single place (~30-40 pages) – documented evidence of your arrangements that can be easily shared with others. This is particularly useful for CPS 230 & FAR when dealing with APRA regulated insurers – the manual is an accessible, learning tool for your staff – at a glance you can view your key controls – the manual provides you with an operating rhythm for risk & compliance 𝙏𝙝𝙚 𝙛𝙚𝙖𝙩𝙪𝙧𝙚𝙨 – your manual is crafted based on what you do. If you are a Licensee, Auth Rep, Code subscriber, Lloyds coverholder etc your manual talks about the uniqueness of your business based upon the nature & scope of what you do & how you do it – the manual is a source of staff training. Written in plain english, the manual provides easy-to-understand & concise guidance. Sources of law, Code & regulatory guidance are included as footnotes for when you need to know a little bit more. If something does not apply to your business, its not included. This reduces complexity, uncertainty & confusion. – the manual includes the context for each obligation & incorporates your key controls. This joins the dots for your people, key stakeholders & partners in understanding how your control environment manages your obligations. – the manual provides an operating rhythm for: a) governance including oversight by your board/senior management & your risk & compliance committee; b) roles & responsibilities c) risk management process d) licence management e) control testing f) monitoring of your people, Auth Reps & material servcie providers g) incident management & breach reporting h) dealing with regulatory change. – the Manual reflects your business. Its branded with your Corporate logo & colours, it talks about your AFS Licence or your Auth Rep scope, your AFCA responsibilities, your obligations under Code, your obligations as a member of a group network or industry body If you are a Steadfast broker & use CCX 360, the manual includes that. If you are a Lloyds coverholder, the manual includes Lloyds market bulletins If you have a binder, the manual includes your key binder obligations. If you are a material service provider, the manual assists in managing the expectations of your partners. 𝘼𝙨𝙨𝙪𝙧𝙖𝙣𝙘𝙚 Importantly, your Risk & Compliance Manual provides assurance of the adequacy of your compliance arrangements to your key stakeholders The Manual clearly shows: the sources of your obligations =>your obligations => your key controls. If you are interested in understanding how a tailored, fit-for-purpose Risk & Compliance Manual can benefit your business, contact me.

I have worked with more than 175 firms in general insurance, providing compliance assistance. I’ve found that the best leaders consistently possess certain fundamental qualities & skills when viewed through a compliance lens. 𝗛𝗼𝘄 𝗱𝗼 𝘆𝗼𝘂 𝗰𝗼𝗺𝗽𝗮𝗿𝗲 𝗮𝗴𝗮𝗶𝗻𝘀𝘁 𝘁𝗵𝗲𝘀𝗲 𝟭𝟬 𝗰𝗼𝗺𝗽𝗹𝗶𝗮𝗻𝗰𝗲 𝗹𝗲𝗮𝗱𝗲𝗿𝘀𝗵𝗶𝗽 𝗮𝘁𝘁𝗿𝗶𝗯𝘂𝘁𝗲𝘀? 1. 𝘿𝙤𝙣’𝙩 𝙙𝙚𝙛𝙚𝙧 𝙖𝙘𝙘𝙤𝙪𝙣𝙩𝙖𝙗𝙞𝙡𝙞𝙩𝙮 Good leaders don’t say ‘compliance is someone elses job’. They own responsibility for compliance in their business area & are accountable & take ownership for control-breakdowns, issues & breaches & resultant customer remediation. 2. 𝙋𝙧𝙤𝙩𝙚𝙘𝙩 𝙮𝙤𝙪𝙧 𝙩𝙚𝙖𝙢 𝙢𝙚𝙢𝙗𝙚𝙧𝙨 They protect the careers of their team members. They ensure that compliance arrangements provide a safe environment for team members to perform their work. Good leaders make staff aware of their compliance obligations through training &, consistently, through team meetings. Good leaders protect team members from the team members ‘compliance ignorance’ through adopting Sandard operating procedures, implementing sales, underwriting & claims guidelines & through business documented business practices, systems & ongoing training. 3. 𝘾𝙧𝙚𝙖𝙩𝙚 𝙖 𝙨𝙖𝙛𝙚 𝙚𝙣𝙫𝙞𝙧𝙤𝙣𝙢𝙚𝙣𝙩 Leaders create a safe environment for team members to self-report incidents, breaches & complaints quickly. They accept that team members are human & make mistakes. They are fair & equitable in their responses to compliance incidents. They remain calm & focused on facts when presented with potential customer or business harm arising from something going wrong within their team. They remain focused on remediation & rectification and not retribution. 4. 𝘽𝙚 𝙞𝙣𝙛𝙤𝙧𝙢𝙚𝙙 𝙖𝙣𝙙 𝙖𝙬𝙖𝙧𝙚 𝙤𝙛 𝙞𝙣𝙙𝙪𝙨𝙩𝙧𝙮 𝙘𝙤𝙢𝙥𝙡𝙞𝙖𝙣𝙘𝙚 𝙝𝙖𝙥𝙥𝙚𝙣𝙞𝙣𝙜𝙨 Leaders stay on top of compliance change, they are curious & seek to understand how upcoming changes (such as CPS 230, FAR, Code review, flood inquiry) may impact their area of accountability & risk profile. They seek out the advice & counsel from compliance & legal specialists to fully understand the impacts of regulatory (& Code) change. They openly discuss with their team news headlines (commission payments, premium affordability & availablity) even when those conversations may be difficult due to potential business impacts. 5. 𝙊𝙗𝙩𝙖𝙞𝙣 𝙙𝙖𝙩𝙖 𝙛𝙤𝙧 𝙮𝙤𝙪𝙧 𝙖𝙧𝙚𝙖 𝙤𝙛 𝙧𝙚𝙨𝙥𝙤𝙣𝙨𝙞𝙗𝙞𝙡𝙞𝙩𝙮 They obtain data (incidents, breaches, complaints, control testing, QA etc) to inform them of the adequacy of compliance arrangements for their area of accountability. They drill-down & ask questions including when there is a lack of data They compare their area’s data with other business areas from a learning perspective not from a competition perspective. 6. 𝙒𝙖𝙡𝙠 𝙩𝙝𝙚 𝙩𝙖𝙡𝙠 – 𝙖𝙩𝙩𝙚𝙣𝙙 𝙖𝙣𝙙 𝙚𝙢𝙗𝙧𝙖𝙘𝙚 𝙮𝙤𝙪𝙧 𝙤𝙬𝙣 𝙩𝙧𝙖𝙞𝙣𝙞𝙣𝙜 They are mindful of the compliance shadow they cast. Good leaders enthusiastically inform team members about upcoming compliance training the leader is attending & share the outcomes & learnings back with the team. They consistently demonstrate through their actions how compliance protects the business, their team members, customers & business partners 7. 𝙐𝙨𝙚 𝙘𝙤𝙢𝙥𝙡𝙞𝙖𝙣𝙘𝙚 𝙞𝙨𝙨𝙪𝙚𝙨, 𝙗𝙧𝙚𝙖𝙘𝙝𝙚𝙨 𝙖𝙣𝙙 𝙘𝙤𝙢𝙥𝙡𝙖𝙞𝙣𝙩𝙨 𝙖𝙨 𝙖 𝙡𝙚𝙖𝙧𝙣𝙞𝙣𝙜 𝙚𝙭𝙥𝙚𝙧𝙞𝙚𝙣𝙘𝙚 They use data from their own area together with other business areas to provide learnings & business continuous improvement. They use story-telling from their lived experience to bring compliance to life for the team. They use practical business examples to create […]

Your people are a critical part of your compliance arrangements and serve the purpose of being your early warning system. In addition to employees, this includes Authorised Representatives, Material Service Providers and anyone acting on your behalf to provide your financial services and general insurance products. Your compliance arrangements provide a safe place to do business. Your Compliance arrangements are the (1) governance & frameworks, (2) people & culture, (3) processes & procedures & (4) systems & reporting, that collectively operate together and provide a fortress, protecting what matters – the business & its customers, people, partners & stakeholders. What is an incident However, stuff happens and things go wrong. Technically, this means there has been a break-down in your control envirronment. When this happens, an incident has escaped from within the safe harbour of your compliance arrangements. The sole purpose of an incident is to cause as much harm and chaos in the shortest time possible. Incidents act stealthily. They lurk in the shadows causing loss, harm and detriment until detected. An incident may or not not be a breach, however, if left undetected they will exponetially grow until they are so big that they have manifested into a breach of obligations/code or a complaint & become visible to customers and regulators It is critical to identify incidents as early as possible. An incident, self-identified & reported on day 1, may cost the business $1,000; 4 years later, the same incident may have matured into a breach & cost $xx million + interest + lost management time + reputational impacts + regualtory enforcement action. Your people as an early warning system Your compliance arrangements are the first layer of protecting what matters. Your people are the 2nd layer. Your people vigilantly survey the landscape waiting to identify & self-report when ‘something has happened that shouldn’t have or hasn’t happened that should have’ (the definition of an incident). In this context, incidents are those being self-identified & reported & not incidents discovered through other mechanisms such as quality assurance monitoring, 2nd line oversight, customer complaints or regulatory activity. The golden rules of incident management The quicker an incident is identified & raised, the less likelihood of harm or detriment being caused Provide a safe environment to raise incidents Be conservative & raise everything. Look at the root cause and review the control environment Use AIRR Awareness Identify Raise Report Awareness Train your people on what an incident is (identify) and what to do when detected (report). Your training should not focus on the 10,000+ laws & Code that governs our industry. Provide examples of what an incident in each area of the business looks like – sales, underwriting, claims, finance, broking etc An incident, something has happened that shouldn’t have, is: a pool of water on the staff kitchen floor my IT system is down for 30 minutes I didn’t send out an FSG or PDS I haven’t completed my training I think I provided the customer some incorrect information […]

In a speech to the ICA Annual Conference in Brisbane yesterday, APRA Executive Board member, Suzanne Smith said, ‘a focus for APRA over the coming year: [is] the risk associated with outsourced underwriting to agencies.’ Ms Smith continued Partnering with experts to underwrite hard-to-place risks or to reduce operational and distribution costs can be a strategy. However, it is important to remember that the responsibility for core underwriting decisions always remains with the licensed insurer, as insurance risk and accountability are the very reason why insurers hold licences in the first place. Strong governance practices are crucial here, including robust on-boarding and exit plans, elimination or clear management of conflicts of interest, adequate governance resources, and sound data security. This also extends to scaling operations, such as ramping up claims handling during a crisis. The key takeaway is that while authority can be delegated, the ultimate responsibility remains solely with the insurer. The intersection between Prudential Standard CPS 230 & AFS Licence obligations I asked the question from the floor, ‘how should the dichotomy between the obligations of an APRA regulated insurer in respect of CPS 230 for underwriting agencies be managed, given the independent obligations of an agency holding an AFS Licence?‘ Let me answer my own question. CPS 230 requirements An APRA-regulated entity must … manage the material risks associated with using [material service] providers. Material service providers are those on which the entity relies to undertake a critical operation or that expose it to material operational risk. (paragraph 49 CPS 230) Underwriting Agencies, TPA’s (insurance claim managers) & insurance brokers with delegated underwriting authority are deemed to be material servcie providers, unless the insurer can justify otherwise (p 50). Operational risk is defined to include but not limited to legal risk, regulatory risk, compliance risk, conduct risk, technology risk, data risk and change management risk. (p24) AFSL requirements Underwriting agencies (& TPAs & brokers), who hold an AFS Licence, have general obligations (refer section 912A(1) Corporations Act) including the obligation to have adequate risk management systems (s912A(1)(h)). ASIC expects that Licensee’s risk management system will be: (a) be based on a structured and systematic process that takes into account your obligations under the Corporations Act; (b) identify and evaluate risks faced by your business, focusing on risks that adversely affect consumers or market integrity (this includes risks of non-compliance with the financial services laws); (c) establish and maintain controls designed to manage or mitigate those risks; and (d) fully implement and monitor those controls to ensure they are effective. (refer RG 104.62) Importantly, ASIC also notes that [the licensees] risk management systems will depend on the nature, scale and complexity of their business and their risk profile (my emphasis). They will be different for each licensee. (RG 104.63) So what does this mean for insurers and their underwriting agencies? It follows from the above, that: Underwriting Agencies holding an AFS Licence must have a fit-for-purpose system of managing risk, including operational risk Insurers must manage the risk, […]

I was honoured to be part of the three-person panel to have undertaken an independent review of the GI Code of Practice, as part of the regular 3-year Code continuous improvement cycle. The panel was chaired by former APRA Deputy Chair Helen Rowell & consumer expert Gerard Brody We made 101 recommendations, reflecting the rapid change in consumer standards and expectations since the 2020 Code. The Insurance Council of Australia will undertake a detailed review of the recommendations & engage with members & key stakeholders to prepare a whole-of-industry response in coming weeks. Some of the recommendations include: – the expansion of financial hardship support to include people who need help maintaining premium payments – redrafting of Code language to avoid consumers having to identify as being in vulnerable circumstances to access support – a broader definition of vulnerability – a range of protections for customers affected by family violence – overarching obligation for education & training requirements for employees, distributors & service suppliers & must include the Code, vulnerability & complaint management – all parts of the Code applying to small business, adopting the AFCA definition of small business – a decoupling of the Code from legal definitions of retail client, wholesale client & general insurance products – insurers having effective systems to monitor the conduct of distributors & service suppliers in respect of Code compliance – unanticipated additional costs (removal of debris & architectural fees) provided as policy benefits & not as part of sum insured – meaningful updates on claims progress to be provided every 20 days – additional requirements for cash settlements – minimum standards for experts – an increase in the maximum Community Benefit Payment to $200,000 (indexed annually) – the Code be incorporated into customer contracts so that they are contractually enforceable The full report can be accessed from the Code of Practice Review website.

Not adequately managing conflict of interests (CoI) is a breach of AFS Licence obligations &, in the more serious cases, can lead to individuals being banned or disqualified by ASIC & or civil/criminal penalties. 𝙒𝙝𝙖𝙩 𝙞𝙨 𝙖 𝙘𝙤𝙣𝙛𝙡𝙞𝙘𝙩 𝙤𝙛 𝙞𝙣𝙩𝙚𝙧𝙚𝙨𝙩 𝙞𝙣 𝙂𝙄? A CoI occurs when your Interests (direct or indirect), or a duty you owe to a person (such as a broker to a client), conflicts, or may reasonably be thought to conflict, with the proper performance of your functions & duties at your company or to the client. Licensee’s obligations extend to the conduct of employees, Directors & Authorised Reps. I use the term employee however the examples also relate to ARs & Directors Typical GI examples are: – an employee is employed by or gains remuneration from a competitor or supplier (such as a claims service supplier) – an employee receives gifts or entertainment from other companies who the licensee does business with (such as a broker being entertained by an insurer at an event) – an employee having interests or investments in competitors, customers or suppliers (such as insurers or brokers in underwriting agencies) – engaging in transactions where a personal relationship exists. Such as managing the claim of a family member – conducting business with a related company – making use of confidential information. Such as an underwriter being advised of a potential M&A for an insured & using that information to trade shares on the ASX (or telling others who then trade) – bribery, inducements etc especially where to gain a business advantage – an employee having multiple roles in the licensee – Director, shareholder, Responsible Manager, CRO etc 𝙈𝙖𝙣𝙖𝙜𝙞𝙣𝙜 𝙘𝙤𝙣𝙛𝙡𝙞𝙘𝙩𝙨 𝙤𝙛 𝙞𝙣𝙩𝙚𝙧𝙚𝙨𝙩 The 3 mechanisms for managing CoI are: – disclosing the conflict – controlling the conflict & – avoiding the conflict Disclosure should be clear & transparent & not just hidden in a FSG 𝘾𝙤𝙢𝙥𝙡𝙞𝙖𝙣𝙘𝙚 𝙖𝙧𝙧𝙖𝙣𝙜𝙚𝙢𝙚𝙣𝙩𝙨 At a minimum, a Licensee should implement: – due diligence for new employees, companies etc – a tailored CoI policy (including gifts & entertainment, bribery, insider trading) – a CoI register – CoI training – Monthly attestations – Monitoring Contact me for assistance in reviewing your approach to adequately managing Conflict of interests.

Referral arrangements continue to be a very popular mechanism to promote & distribute insurance products & services. Where a financial service is only a referral you do not need to hold an AFS Licence. A typical referral arrangement consists of: 1. informing a person (customer) that a licensee (or its AR) is able to provide a particular financial service; & 2. giving that person the contact details for the licensee or representative. A simple example is an industry association referring members to an insurance broker or underwriting agency, to meet the insurance needs & requirements of its members. If the referrer receives any benefits for the referral, these must be disclosed to the person, by the referrer. 𝘼𝙧𝙧𝙖𝙣𝙜𝙞𝙣𝙜 𝙜𝙚𝙣𝙚𝙧𝙖𝙡 𝙞𝙣𝙨𝙪𝙧𝙖𝙣𝙘𝙚 A problem arises, when the referrer is doing more than 1 & 2 above. They may also: – assist the customer to complete a proposal/application form; – display brochures for the broker or underwriting agency; – co-brand the on-line quote/marketing tool; – receive a percentage of the commission; or – offer premium payment facilities. Some or a combination of these activities may constitute ‘arranging’. Arranging is a form of dealing & is an AFS licensed activity. Arranging occurs when a person brings into effect the issue, variation, disposal or acquisition of, or application for, a financial product. Conduct may constitute arranging if the ‘referrers’ involvement in the chain of events leading to the relevant general insurance transaction, was of sufficient importance that without their involvement the transaction would probably not take place. Arranging is a question of fact & requires careful legal analysis. It is an offence to provide unlicensed financial services. ‘Referring’ is not a financial service, ‘arranging’ is. The line between the 2 can be blurred with significant consequences. 𝙈𝙖𝙣𝙖𝙜𝙞𝙣𝙜 𝙩𝙝𝙚 𝙘𝙤𝙢𝙥𝙡𝙞𝙖𝙣𝙘𝙚 𝙧𝙞𝙨𝙠 𝙤𝙛 𝙧𝙚𝙛𝙚𝙧𝙧𝙖𝙡 𝙖𝙧𝙧𝙖𝙣𝙜𝙚𝙢𝙚𝙣𝙩𝙨 There are a number of steps that should be taken to protect everyone involved in a referral arrangement. 1. Conduct due diligence on your proposed referrer – are they of good standing & character? 2. Obtain legal advice & be aware of the guardrails 3. Execute a legally binding agreement clearly setting out what the referrer can & can’t do. 4. Understand remuneration & conflict of interests. Is the payment to the referrer commensurate with the value they are adding? 5. Provide training & support materials to ensure the referrer is aware of & understands the boundaries, the consequences of non-compliance & how to report incidents & complaints 6. Ongoing monitoring is critical, care must be taken that they don’t morph to ‘arranging’ ASIC RG 36 provides information on ‘referrals’ & ‘arranging’. Contact me if you have any questions.

𝟭𝟳 𝗦𝗲𝗽𝘁𝗲𝗺𝗯𝗲𝗿 𝟮𝟬𝟮𝟰 ASIC Chair Joe Longo has provided some great insights talking about the role of the compliance professional. Key points: – the role of a compliance professional is a critically important one. You are part of the fabric of the business – not only to help your organisation meet its legal obligations, but to help create an ethical culture, where employees act in the best interests of its customers – It’s the role of the directors of a company to set the tone, establish & lead a culture of compliance. This includes monitoring the arrangements the company has in place to ensure compliance with regulatory obligations. But it’s the compliance professionals who are closer to the nuts & bolts of how the business runs. They actually do the work to support & implement those arrangements. – An effective regulatory compliance program must reflect the organisation’s key values & ethos – & focus on putting customers at the centre of how the organisation operates. – A compliance professional is, in essence, a gatekeeper – a trusted adviser to the board, relied on for well-thought-out advice. – Written policies & procedures provide the framework for compliance. Systems, processes, & technology can be used to underpin & support compliance. But compliance in practice requires a culture of integrity, ethics, & trust. – What’s needed is an attitude of compliance, based on a curious mind that asks the right questions. Questions like: What are our obligations? What are the risks? How can we manage them? What systems & controls should be in place to ensure we meet our obligations? Is what we are doing both legal & ethical? How can we make sure they’re being followed? Do I have an open line to the board? Am I keeping them informed? – Your role (as a compliance professional) is to refine the systems & controls, & to call out what’s working & what can be improved. That will enable the board to look ahead to spot the risks, think about how to balance the legal & commercial perspectives, & monitor the compliance arrangements that the company has in place. – And so, more than ever, you play an influential & strategic role in the boardroom – a role that is critical in ensuring effective compliance.

In General Insurance, Authorised Representative (AR) models continue to be popular for Insurance brokers & to a lesser degree for Underwriting Agencies & TPAs. 𝘼𝙥𝙥𝙤𝙞𝙣𝙩𝙞𝙣𝙜 & 𝙘𝙚𝙖𝙨𝙞𝙣𝙜 𝙖𝙣 𝘼𝙪𝙩𝙝𝙤𝙧𝙞𝙨𝙚𝙙 𝙍𝙚𝙥 Sections 916A-F of the Corps Act, as modified by Corps regs 7.6.04AA & 7.6.08, relate to the appointment & cessation of ARs by AFS licensees. Licensees must notify ASIC within 30 business days of the date an authorisation is issued. 𝗢𝗯𝗹𝗶𝗴𝗮𝘁𝗶𝗼𝗻𝘀 𝗼𝗳 𝘁𝗵𝗲 𝗟𝗶𝗰𝗲𝗻𝘀𝗲𝗲 𝗳𝗼𝗿 𝘁𝗵𝗲𝗶𝗿 𝗔𝗥’𝘀 Licensees must ensure that their AR’s have, & the AR’s must have, compliance measures to: – provide the financial services efficiently, honestly & fairly – adequately manage conflicts of interest – comply with the financial service laws – have adequate resources (human, IT & financial) to provide the services – ensure its people are adequately trained & are competent – have adequate risk management systems – identify complaints, incidents & breaches & report those to the licensee – the trust account for client money must be in the name of the Licensee however the AR may be involved in directing the money into that account 𝙊𝙗𝙡𝙞𝙜𝙖𝙩𝙞𝙤𝙣𝙨 𝙤𝙛 𝙖𝙣 𝘼𝙍 AR’s have independent obligations: – must not hold out they have an AFS Licence – can only sub-authorise individuals with the licensees consent – include its AR number in business documents & website – provide a copy of its authorisation on-request, free of charge within 10 business days – provide retail clients with a FSG – provide a general advice warning when providing general advice – comply with the hawking prohibtion – when engaging in retail product distribution comply with TMD requirements – must not make false statements or engage in dishonest, misleading or deceptive conduct 𝘼𝙍 𝙤𝙗𝙡𝙞𝙜𝙖𝙩𝙞𝙤𝙣𝙨 𝙪𝙣𝙙𝙚𝙧 𝙞𝙣𝙙𝙪𝙨𝙩𝙧𝙮 𝙘𝙤𝙙𝙚𝙨 𝘎𝘐 𝘊𝘰𝘥𝘦 – 𝘜𝘯𝘥𝘦𝘳𝘸𝘳𝘪𝘵𝘪𝘯𝘨 𝘈𝘨𝘦𝘯𝘤𝘪𝘦𝘴 𝘰𝘳 𝘛𝘗𝘈𝘴 – deal with customers in a honest, efficient, fair, transparent & timely manner – be trained & have relevant expertise – advise the customer of what they are authorised to do – notify the insurer of complaints & breaches within 2 business days – generally comply with the Code 𝘕𝘐𝘉𝘈 𝘉𝘳𝘰𝘬𝘦𝘳𝘴 𝘊𝘰𝘥𝘦 – 𝘐𝘯𝘴𝘶𝘳𝘢𝘯𝘤𝘦 𝘣𝘳𝘰𝘬𝘦𝘳𝘴 𝘸𝘩𝘰 𝘢𝘳𝘦 𝘈𝘙𝘴 – comply with the Code when acting on behalf of the licensee – have the expertise, skills & experience to provide the services – receive appropriate education & training – be reviewed annually by the Licensee for Code compliance 𝗖𝗼𝗺𝗽𝗹𝗶𝗮𝗻𝗰𝗲 𝘀𝗲𝗿𝘃𝗶𝗰𝗲𝘀 To assist Licensees & their AR’s, I provide the following compliance services: 1) design tailored & fit-for-purpose Monitoring Programs for AFS Licensees; & 2) design tailored & fit-for-purpose compliance arrangements for ARs