Compliance Newsletter – March 2018

FCA consults on its approach to supervision and enforcement
The FCA is consulting until 21 June 2018 on changes to its strategy for supervising firms in the financial services market, with the aim of taking a more forward-looking and pre-emptive approach.

For more information, click here.

The FCA is also seeking views about its approach to enforcement, to identify and drive out any behaviours which fail to meet its standards, or are dishonest or unlawful. Again, feedback is requested by 21 June 2018.

For more information, click here.

Transforming culture in financial services
The FCA has issued a discussion paper, in the form of a set of essays, on transforming culture in financial services. This considers what a good culture might look like, the role of regulation and regulators, how firms might go beyond incentives and how to change behaviour for the better.

To read the discussion paper, click here.

Delay to IDD officially confirmed at European level
The delay in implementing and applying the Insurance Distribution Directive (IDD) to 1 July 2018 and 1 October 2018 respectively has been announced in the Official Journal of the European Union.

Click here to read the announcement.

FSCS to raise supplementary levy
The Financial Services Compensation Scheme (FSCS) has announced that it is to invoice insurance intermediaries for a supplementary levy for the 2017/18 fee year. This results from claims against the life and pensions intermediation class having exceeded the levy limit, requiring other participants in the ‘retail pool’ to make up the shortfall.

For more information, click here.

Update on FCA ‘value measures’ pilot
The FCA has published the second set of data on its general insurance value measures pilot. This covers data for 36 insurers for the year ending 31 August 2017.

The value measures used include claims frequencies, claims acceptance rates and average claims pay-outs by insurer, for two primary products (home buildings/contents and home emergency) and two add-on products (personal accident and lost keys cover).

The FCA will decide later in 2018 whether to undertake a third pilot.

For more information, click here.

FOS publishes complaints data for H2 2017
The Financial Ombudsman Service (FOS) has published figures showing the number of complaints it received and resolved during the six months from 1 July to 31 December 2017. These figures cover financial services businesses where there were 30 or more cases in each category. Overall, the total number of new GI complaints dropped by 16% compared to the first half of the year.

For more information, click here.

FCA to consult on information shown in public register
The FCA is planning to consult later in 2018 on a proposal to make information available on a wider range of individuals at authorised firms. This follows its plans to extend the Senior Managers and Certification Regime (SM&CR) to almost all regulated firms. The regulator will be asking whether a central public record of certification employees, as well as other important individuals (such non-executive directors) should be maintained.

For more information, click here.

Lloyd’s model wordings updated
The Lloyd’s Market Association (LMA) has amended its model Terms of Business Agreements to reflect the General Data Protection Regulation (GDPR, coming into effect on 25 May 2018) and the Criminal Finances Act 2017 (already in effect). These are model agreements for use by Lloyd’s managing agents and Lloyd’s brokers. The International Underwriting Association (IUA) has made similar amendments in respect of the equivalent company market agreements.

The updated TOBAs and endorsements can be found here. This page also contains the updated model binding authority and other agreements which were published by the LMA on 5 March 2018.

Lloyd’s Consumer Wordings Guidance updated
The latest version of the Joint LMA/Clyde & Co Guidance on Consumer Wordings is available to download from the LMA website. It contains various updates, including reference to the FCA’s Smarter Consumer Communications Initiative and changes brought about by the GDPR and IDD.

For more information, click here.

Survey for EEA inbound passported firms
The FCA is asking EEA firms which are solo-regulated in the UK to complete a survey about its plan to allow temporary permission for them continue trading in the UK for a period of time after BREXIT, while seeking full authorisation to do so.

For more information, click here.

EEA firms which are also regulated by the PRA should refer to the announcement made by the PRA in December 2017.

FCA launches call for input on the use of technology to achieve smarter regulatory reporting
The FCA is asking for input on how technology can make it easier for firms to meet their regulatory reporting requirements, as well as improving the quality of the information they provide. The objective is to make the current system of regulatory reporting more accurate, efficient and consistent.

For more information, click here.

The information provided in this Newsletter is based on the Managing General Agents’ Association’s knowledge and understanding of regulatory issues at the date of publication. However, it is generic in content, and matters in UK regulation change regularly. Members should take their own professional advice in connection with any issues which could affect their business. The Managing General Agents’ Association accepts no responsibility or liability for any actions taken based on the information contained within this Newsletter.

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