2017年-FCA英国金融行为监管局_thematic_review_principals_and_their_appointed_representatives_in_general_insurance_gi_sector_4页_142kb

Regulator Assessment Summary: Qualifying Regulatory Provisions

Core Content

The FCA conducted a thematic review titled "Principals and their Appointed Representatives (ARs) in the General Insurance (GI) sector" between 22 July 2016 and 27 February 2017. The review aimed to assess the extent to which principals (authorised firms) understood and complied with their regulatory responsibilities in relation to their appointed representatives (ARs), who are unauthorised individuals or entities that use the principal's regulatory permissions to offer insurance products.

The review focused on the control and oversight mechanisms that principals must implement to ensure that ARs sell insurance products in a compliant manner and deliver fair outcomes to customers. It highlighted that the ARs in the review sold a wide range of products, including home, motor, travel, guaranteed asset protection (GAP), warranty, and commercial combined insurance, through various distribution channels.

The FCA found significant shortcomings in the control and oversight of ARs by many principal firms, which increased the risk of mis-selling and led to actual and potential customer detriment. However, the review did not introduce any new or amended regulatory requirements but rather assessed compliance with existing rules and guidance.

Main Concerns

• Material risk of customer detriment due to inadequate control and oversight of ARs.
• Lack of understanding among principals about their responsibilities towards ARs and customers.
• Insufficient resources and controls to monitor and enforce compliance with relevant requirements.
• Need for a robust risk management framework to address the risks posed by ARs.

Key Findings

• The review focused on existing rules and guidance from the FCA Handbook, particularly:
  • SUP 12.4.2R (responsibilities of principals)
  • SYSC 3.1, 3.2, 4.1 (controls and oversight requirements)
  • SUP 12.1.3G (fit and proper requirements for ARs)
  • SUP 12.4.4G (due diligence and suitability assessment)
  • SUP 12.5 (contractual arrangements with ARs)
• The review did not introduce new obligations, but reinforced the importance of existing ones.
• The BIT score for the review was 2.0, indicating a moderate impact on business.

Impact to Business

Affected Business Types

• Authorised firms in the GI sector that have appointed ARs.
• Estimated number of affected firms: 1,668.

Cost Breakdown

Assumptions

• The cost rate used for compliance staff is £48/hour, based on an estimated annual salary of £100,000.
• Reading rate assumed to be 100 words per minute.
• Gap analysis for each firm is estimated to take 37.5 hours, based on 75 areas of assessment.
• Total gap analysis hours: 62,550, resulting in an estimated one-off cost of £3.0M.
• Remediation costs are considered zero as the expectations are already part of existing rules and do not add new obligations.

Additional Information

• The published report can be accessed at: TR16/6
• The Robert Half salary guide for compliance staff is available at: Salary Centre 2016

Conclusion

The thematic review reinforced the importance of principals maintaining adequate control and oversight over their appointed representatives to ensure compliance with regulatory requirements and fair treatment of customers. While the review did not introduce new obligations, it highlighted the need for firms to review and improve their existing control frameworks. The familiarisation and gap analysis costs are the main financial implications for affected firms, with no remediation costs estimated due to the alignment with existing rules.