LMA Claims Foundation Programme. Module 4. Peter Schwartz Giles Taylor

Transcription

1 LMA Claims Foundation Programme Module 4 Peter Schwartz Giles Taylor 1

2 A Fair Presentation.. 2

3 A Fair Presentation of Risk What Actual Knowledge does Insured have? - Individual - Not an individual What Ought Insured to Know? What is a "reasonable" search? - Of own organisation? - Of agent - What is meant by making enquiries "by any other means"? "utmost good faith" v "fair presentation" "Basis of the contract" clauses unenforceable What Does Insurer Actually Know? - Who participates in risk taking decision - Employees of insurer's agent or any other capacity What Ought the Insurer to Know? What does broker know? - Which he/she must advise (which insured does not already know) What Need Not Be Disclosed? At what point does insured not need to disclose suspicions and/or results of enquiries in relation to them? What is the Insurer Presumed to Know? 3

4 Learning Objectives Following Module 4, you will be able to appreciate and outline the core regulatory framework for authorisation and supervision of insurance entities engaged in regulated activities the division of responsibility between the three core supervisory bodies and the guiding principles under which they operate the principles embedded in the TCF initiative and the ICOBS rules as they relate to claims handling the guiding principles for handling complaints and the role of the FOS the way to behave ethically in claims handling and the importance of transparency and objectivity in recognising, communicating and managing conflicts of interest the main principles of Lloyd s regulation and its practical features the importance of training and competence in the life cycle of claims 4

5 Overview (1) The recent history of insurance regulation: Financial Services and Markets Act 2000 (FSMA) came into force on 1 December creating a single financial services regulator called The Financial Services Authority (FSA) Previously there had been different regulators for insurance, banking and investment management (securities) but, FSA had regulatory responsibility for general insurers, intermediaries and Lloyd s FSA had four main statutory objectives: maintaining confidence in the financial system financial stability of the financial system protection of consumers reducing financial crime Due to financial crisis from 2008, which included the collapse and government rescue of high profile institutions, the government reformed the financial services industry 5

6 Overview (2) The result of the overhaul was a new regime created with effect from 1 April 2013, under the Financial Services Act 2012, which involved the abolition of the FSA The key fundamental change was to pass responsibility for the stability of UK s financial institutions to The Bank of England - whose role was enhanced with fresh objectives Three new regulatory institutions were created: Financial Policy Committee ( FPC ) Prudential Regulation Authority ( PRA ) Financial Conduct Authority ( FCA ) Due to regulatory overlap between the PRA and FCA, they were required to co-ordinate their functions and activities and to produce a Memorandum of Understanding ( MoU ) showing how they would work together 6

7 Overview (3) FPC - function is to protect and enhance the stability of the financial system - identifying and dealing with systemic risks which pose threats and protect the resilience of the system PRA - function is to regulate and supervise banks, insurers, investment firms and others and to promote their financial safety and soundness. In relation to insurance, there is a key objective of protecting policyholders FCA - function is to ensure that the relevant markets function well through three operational objectives: secure an appropriate degree of consumer protection ( consumer protection objective ) protect and enhance the integrity of the financial system in UK ( integrity objective ) promote efficiency and choice in the financial services markets ( competition objective ) 7

8 Regulation by PRA and FCA Insurers, including Lloyd's syndicates, are dual regulated by PRA and FCA. The authorisation and prudential supervision is handled by PRA and conduct is regulated by FCA Intermediaries are regulated by FCA only Principles and Fundamental Rules form part of the PRA Handbook, the PRA Rulebook and the FCA Handbook which contain detailed rules laid down by the PRA and FCA relating to internal procedures and interpretations of the various rules The PRA Rulebook contains several Parts which contain a series of short statements and guidance notes in relation to specific topics 8

9 Principles for Business of the FCA and PRA All regulated businesses are required to observe the PRA s 8 Fundamental Rules and the FCA s 11 Principles for Business. The main requirements are: to conduct business with integrity and due skill, care and diligence to act in a prudent manner to take reasonable care to organise the business responsibly and effectively with adequate risk management systems to maintain adequate financial resources to pay due regard to the interests of customers and to treat them fairly to deal with regulators openly and co-operatively 9

10 Regulation by PRA (1) PRA s approach to supervision is intended to be forward looking and judgmentbased A review of the current risks faced by a firm is undertaken and an assessment made of how the firm deals with them A judgment is made about what risk an insurer poses to the financial system and to its policyholders and therefore what level of supervision is required Insurers are placed into potential impact bands 1-5 depending upon whether an insurer has significant capacity to cause disruption to the interests of a significant number of policyholders (Band 1) or no or a low risk (Band 5) An assessment is also made of the risk mitigation processes which insurer has instigated to protect its business, including reviewing the insurer s: management and governance structure risk management and controls financial resources ability to exit the market in an orderly manner 10

11 Regulation by PRA (2) The PRA monitors insurers to satisfy themselves that certain statutory threshold conditions are being observed - such as: adequate financial (and non-financial) resources business conducted in a prudent manner fitness to carry out its business properly being capable of being regulated Having reviewed a range of information received from the insurer and its auditors and relevant data, the PRA prepares a risk assessment framework and decides whether the insurer is managing itself in a safe manner. The reviews are regular but their frequency and detail is dependent upon the category in which the insurer is placed PRA will also evaluate the insurer s proximity to failure level based upon the available information. Level 1 is low risk and level or stage 5 is close to winding up. Attention increases in intensity the higher up the scale the insurer goes 11

12 Regulation by FCA (1) The FCA is the conduct regulator for insurers and the prudential and conduct regulator for intermediaries Although the FCA does not have power to approve or mandate policy terms or premium rates, it will concern itself with insurance product governance and life cycle The FCA will interest itself in the way in which a product is designed, operates and is sold Powers of intervention also exist to prevent harm to policyholders The FCA has said that in fulfilment of its mission, it will be more intrusive, interventionist and inquisitorial than the FSA 12

13 Regulation by FCA (2) The FCA adopts a risk-based approach to its supervisory role. This takes three forms: Systematic framework - this assesses conduct, in the context of the insurer s business model and specifically, how the insurer embeds TCF into its operations. Insurers are given a category in relation to conduct supervision (C1 and C2 closely supervised and C3 and C4 more lightly supervised) Event driven work to help the FCA respond quickly to risks identified in the market Issues and product focus work, to help identify emerging issues which put customers at risk 13

14 Authorisation to Carry on Insurance Business (1) An insurer is not entitled to carry on insurance business in the UK without permission Unless an insurer is exempt from need to obtain permission or it can rely upon EU passporting rights, permission (Part 4A Permission) must be obtained from the PRA. The FCA must also consent An intermediary need only obtain permission from FCA A number of threshold conditions must be satisfied - such as adequate capitalisation and demonstrate that it is fit and proper to carry on the business The PRA can attach conditions or limitations to a Part4A permission; e.g. limit gross premiums written 14

15 Authorisation to Carry on Business (2) Usually an applicant will fill in a draft application form and attach a business plan, details of the applicant s compliance arrangements and other relevant materials and submit this A meeting with the regulator will follow, the regulators requirements will be made known and relevant considerations aired on both sides. The draft application will then be agreed in principle with the regulator before the formal application is signed and submitted The Regulator has six months from receipt of formal application to make its decision The regulator may also require the application to be supported by an accountant or actuary s report 15

16 Passporting Insurers authorised to conduct business in one EEA State are allowed to conduct insurance business in another EEA State without further authorisation, if certain notice requirements are fulfilled The responsibility for supervision of the authorised insurer rests with the regulator in the home state The host state regulator is responsible for conduct of business regulation, although comparatively little such conduct of business regulation exists in other EEA states The PRA takes the lead in applications by insurers for permission to passport in or out of UK Intermediaries should apply to the FCA 16

17 Solvency An insurer must maintain, at all times, adequate capital resources of an amount at least equal to its capital resources requirements (CRR) To get an insurer thinking about what additional capital should be in place beyond the capital threshold, the PRA requires an insurer to prepare and submit to the PRA its own assessment of its capital requirements (an individual capital assessment - ICA) The ICA is based upon the particular risks to which the business is exposed PRA uses the ICA to assess itself the insurer s capital requirements If PRA disagrees with the insurer about the ICA, it can issue an individual capital guidance and impose this on the company if necessary 17

18 Reporting Requirements Each UK authorised insurer must submit to the PRA annual returns and audited financial statements Annual return is used to monitor the solvency of an insurer Directors must certify in writing that they are satisfied the company has complied in all material respects with the Handbook - particularly the sections which deal with Systems and Controls and with the Fundamental Rules 18

19 Control of Insurer (1) No-one can acquire/increase control of UK, authorised insurer without PRA approval When change of control approval for intermediary is sought, FCA will consult PRA if: intermediary is part of a group which includes regulated firm; or new controller is PRA regulated PRA has power to object upon reasonable grounds and may direct FCA to refuse approval or approve subject to conditions This happens particularly where FCA is concerned about money-laundering or terrorist finance 19

20 Control of Insurer (2) What is a Controller? If individually, or with another/others acting in concert: 10% of the shares (or voting power) in the insurer (or its parent company) is held by an individual The individual can exercise significant influence over the management of insurer (by shareholding or voting power) Approval is required if a controller wishes to increase shareholding/voting power beyond specific thresholds 20%, 30% and 50% 20

21 Control of Insurer (3) Regulator has 60 working days to decide whether or not to approve proposed change Regulator will base decision upon specific criteria including: reputation and financial soundness of proposed controller ability of insurer to comply with applicable prudential requirements whether the group (if insurer is part of one) has structure which permits effective regulatory supervision if there are reasonable grounds to suspect money-laundering or terrorist finance, in connection with proposed application 21

22 Approved Persons Regime (1) FSMA introduced a new process whereby individuals who exercised controlled functions are required to be approved as fit and proper persons to perform the relevant functions ( Approved persons regime) Individuals who require approval are: executive (and non-executive) directors chief executives certain managers who can exert a significant influence on the business Note that employees or officers of an unauthorised parent/holding company, whose decisions or views are regularly taken into account by the authorised insurer, need authorisation as an approved person 22

23 Approved Persons Regime (2) The regulator has three months to make a decision upon an approved person application Depending upon particular controlled function which the individual is intended to exercise, the PRA and/or the FCA will review the application Upon approval, the PRA and FCA require approved persons to comply with their codes of practice including: acting with due skill, care and diligence dealing with regulators openly and co-operatively making reasonable steps to make sure insurer s business is properly organised to enable it to be effectively controlled 23

24 Senior Management Systems and Controls Each insurer must appoint one or more member(s) of the senior management team to take responsibility for: the clear allocation of significant responsibilities between directors and senior executives for specific areas of the business oversight of the establishment and maintenance of systems and controls which are appropriate to the particular business Whoever is chosen to have responsibility for a specific business area must be approved by the PRA or FCA under the approved persons regime 24

25 Complaints FOS (1) Since 1 December 2001, insurers have been under mandatory jurisdiction of the Financial Ombudsman Service ( FOS ) The FOS is a huge undertaking, investigating over 300,000 complaints annually and with a current budget in excess of ¼ bn The FCA has responsibility for the oversight of the FOS ensuring: independence from the industry accessibility for complainants fairness in decisions public accountability The objective is to provide a simple, free, accessible alternative to the Courts 25

26 Complaints FOS (2) Complaints to the FOS can be brought by or on behalf of customers or potential (consumers) or micro-enterprises (less than 10 employees and annual turnover of less than 2m) Usual process is: for complainant to go through insurer s internal complaints process if unresolved, to send complaint to FOS within six months of date on which insurer sent final reply to complainant insurer must co-operate fully in the FOS investigation of complaint Ombudsman publishes complaint data: 26

27 Complaints FOS (3) Ombudsman applies a fair and reasonable in the circumstances test in considering complaints In so doing, the FOS considers: the law any relevant regulations and codes of practice the regulator s rules and guidelines good industry practice at the material time Ombudsman gives final reasoned decision in the form of a signed statement 27

28 Complaints FOS (4) Ombudsman s determination invites acceptance or rejection of decision within specific time If complainant accepts, within time limit, decision is binding on both parties If complainant rejects decision or does not accept within specific time, the Ombudsman must notify insurer accordingly Upon non-acceptance, complainant is treated as having rejected decision and insurer is not bound Maximum monetary award Ombudsman can make is 150,000 as fair compensation for financial and/or other loss or damage suffered If insured does not accept FOS decision, the case can be taken to court. Claimants can proceed in the Courts for damages in excess of FOS limit of 150,000 if their losses are above that See Clark and Another v. In Focus Asset Management and Tax Solutions Ltd (2012) 28

29 Complaints FOS (5) Authorised insurers must have in place effective written formal internal complaints procedures and operate these efficiently through a dedicated complaints department Complaints, whether written or oral, should be dealt with timely, fairly and consistently (although no specific time limit is set) The FCA prescribes that: each complaint must be acknowledged in writing promptly each complainant must be kept informed of progress in investigation of the complaint by eight weeks of receipt, the insurer must send a final response, with any compensation offer, accompanied by details of rights to pursue complaint if not satisfied The FCA can impose penalties upon regulated firms for failing to deal with complaints adequately: See FSA s fines to several banks in

30 Conflicts of Interest (1) One of the core Principles for Business endorsed by both PRA and FCA is that a firm must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client ICOBS 8.3 specifically concerns intermediaries. If broker places a policy for an insured, it is likely to be the insured s agent for that purpose. If a claim arises, and the broker intends to or is instructed to act in claims recovery, the broker must consider the risk of being unable to act without breaching its duty to either the insurer or the insured making the claim. The broker should advise the insurer of its intention The FCA recently (May 2014) published its thematic review into Commercial insurance intermediaries - Conflicts of interest and intermediary remuneration (TR14/9). The FCA concluded that there is a risk that brokers make decisions which are not in the best interests of SME policyholders. The FCA cautioned against the assumption by some brokers that complying with ICOBS disclosure requirements is enough to address any conflicts concerns 30

31 Conflicts of Interest (2) The FCA underlined brokers obligations to put in place and maintain effective arrangements to mitigate the risks associated with conflicts of interest These include : segregation of areas responsible for broking and insurance agency activities particularly in relation to entities, reporting lines, locations and awareness of remuneration arrangements maintaining audit trails to demonstrate that insured s needs were taken into account when selecting a particular market to insure a product conducting regular reviews of binding authorities and insurer facilities held and membership of insurer panels to evaluate their performance from the standpoint of the insured s best interests There are many potential conflict pressure points in the claims handling process 31

32 Conflicts of Interest (3) Insurers, acting through their Claims Departments, should have a formal, clear and written policy for managing conflicts This can help show the FCA and insureds that the insurer and any external service providers are managing conflicts properly and treating customers fairly In cases of breach, the FCA can employ a range of disciplinary measures or enforcement orders. Fines are the most obvious but public censure and prosecution are also in the regulator s arsenal Oversight of intermediaries is particularly important as the responsibility for compliance is non-delegable Training programmes and audits are key controlling mechanisms together with a robust remedial policy. Informed transparency is the watchword. Viewing situations objectively from the insured s perspective is a good litmus test. If it looks wrong or bad, then it probably is 32

33 Ethics The CII has published five core duties which together make up a Code of Ethics These duties are: to comply with the CII Code and all relevant laws and regulations to act with the highest ethical standards and integrity to act in the best interests of each client to provide a high standard of service To treat people fairly regardless of age, disability, gender reassignment, pregnancy and maternity, marriage and civil partnership, race religion and belief, sex and sexual orientation The duties may seem obvious but could be forgotten under the pressure of day to day working life. The CII booklet includes helpful Case Studies to illustrate the principles 33

34 Training and Competence The Principles for Business require authorised firms to conduct their business with due skill, care and diligence The FCA publishes an entire Training and Competence rulebook. Its provisions require regulated firms to ensure that: employees are competent employees remain competent for the work they do employees are appropriately supervised the competence of employees is regularly reviewed the level of competence is appropriate to the nature of the business It follows that underwriters, claims handlers, their outsourced agents and brokers dealing with them must be properly trained and competent for the work which they do The FCA has stated that breaches of training and competence requirements will be regarded as evidence of wider more serious management inadequacy 34

35 Giles Taylor Lloyd s Regulatory 35

36 Giles Taylor Agenda 1. Lloyd s and the regulatory environment 2. Regulatory information sources 3. Treating customers fairly (TCF) and ICOBS 8 4. Claims and Complaints 5. Lloyd s minimum standards: Conduct risk 6. Workshop 7. Information sources 36

37 UK Regulation & Lloyd s Prudential regulation Conduct regulation Prudential and conduct regulation 37

38 Lloyd s licensing Licensed or eligible to undertake insurance business Registered or licensed to write reinsurance business US surplus lines approval

39 Intl Regulatory Affairs Risk management Regulators & Government Bodies Dialogue Regulatory affairs Defend & Develop Trading rights Prudential Requirements & regulatory reporting Market Conduct & International trading Compliance Noncompliance & Financial crime Market Comms Lloyd s market (managing agents, brokers, LMA, LIIBA, etc.) 39 Understanding the international regulatory environment

40 Intl Regulatory Affairs Lloyd s suite of licences delivers huge economies of scale for the Market: Over 75 licences equivalent to managing agents holding more than 4,000 licences 900+ regulatory returns equivalent to managing agents preparing over 45,000 returns 60+ licence defence issues in 30+ countries Leading edge compliance advice for 250 countries and territories with over 15,000 registered users Professional guidance and issue resolution on fraud, non-compliance and trade sanctions To replicate IRA function at managing agent level would need approx. 2,000 people costing over 150m 40

41 Information sources Compliance: A collective responsibility But we re here to help: Monitoring international regulation Communicating regulatory and tax requirements Providing the LITA enquiry service Providing online tools

42 Information sources Helps in...identifying legal location of risk Quick and easy access to international regulatory and taxation requirements Monthly bulletins and What s new items Requires registration at lita@lloyds.com Risk Locator Tool Crystal News updates

43 Module 4 Treating Customers Fairly (TCF)

44 Treating Customers Fairly Throughout the product life cycle. Product design After sales care Marketing and promotion Sales and advice initial deadline March 2007

45 Treating Customers Fairly Outcome 1: Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture Outcome 2: Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly Outcome 3: Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale Outcome 4: Where consumers receive advice, the advice is suitable and takes account of their circumstances Outcome 5: Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect Outcome 6: Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint 45

46 Module 4 Claims and Complaints

47 ICOBS 8 Main part of Handbook detailing claims rules, but big influence of contract law and case precedents. ICOBS applies equally to consumers and commercial customers Consumer claims may not be rejected unreasonably: Consumer Insurance (Disclosure and Representations) Act 2012 Can t reject a claim for: Non-disclosure, where policyholder could reasonably be expected to disclose the material fact; Non-negligent misrepresentation of a material fact; Breach of a warranty or condition unless circumstances of the claim are connected with the breach Test of reasonableness does not currently apply to commercial customers Marine Insurance Act, 1906 Insurance Contract Law Reform Bill will change this before Parliament 47

48 ICOBS 8 Other main provisions Insurer remains responsible, even where claims handling is outsourced Intermediaries must act for their client with due care, skill and diligence Authorised entities must avoid their own interests being in conflict with those of their client, unless: Proper disclosure was given whereby the client could consent Authorised entity has prior consent No specific timeframe for responding to claims notification Promptness rule of thumb five days What is reasonable varies according to product Agreed claims must be settled promptly and fairly 48

49 Complaints At the heart of many complaints is a failure on the part of insurers to meet the generalised expectations of consumers. Those expectations are forged in a legal framework drawn up in the 18th and 19th centuries, clarified by a shipping Act at the start of the 20th century and mostly executed with all these ease and complacency of a few clicks on 21st century technology. Perhaps the wonder is that there are so few complaints rather than that there are so many. House of Commons Research Note, Insurance Contract Law Bill, July 2014

50 Complaints: UK rules Dealt with under DISP section of Handbook Any oral or written expression of dissatisfaction, whether justified or not, from, or on behalf of, a person about the provision of, or failure to provide, a financial service, which alleges that the complainant has suffered (or may suffer) financial loss, material distress or material inconvenience. This applies to an eligible complainant defined as: a consumer; a micro-enterprise which employs fewer than 10 persons and has a turnover or annual balance sheet that does not exceed 2 million euros; a charity with an annual income of less than 1 million; a trust with an annual income of less than 1 million. Firm must have in place a process for dealing with non-eligible complainants too! 50

51 Acknowledge Notify Stage 1 review FOS Complaints: UK rules Area of significant focus for Lloyd s and the FCA Revised UK Complaints Handling Code introduced with effect from 1 July 2013 Managing agents must have procedures in place to ensure compliance with Lloyd s requirements and for monitoring Coverholders, TPAs etc Managing agents required to confirm accuracy of reporting and compliance with the Code (quarterly) Increased focus on feedback loops using complaints data to assess coverholders, TPAs, TCF, product lines MA or Lloyd s to acknowledge complaint MA to notify all complaints to Lloyd s weekly MA Stage 1 response within 2 weeks is still dissatisfied, review by Lloyd s. Final response by end of 8 week period Stage 2 reviewif policyholder Policyholder can request Ombudsman review within 6 months of final response 51

52 Complaints: International Subject of continued discussion between Lloyd s and the FCA Problems of consistency of definitions: Complaint Consumer Also problems of conflicting timelines and process 52

53 Module 4 Lloyd s Minimum Standards

54 Minimum standards Advent of the FCA Conduct at Lloyd s Lloyd s Minimum Standards Conduct Risk Issued 30 July In force / Issued following extensive consultation LMA Board The Market recognises that it needs to progress its oversight of conduct risk and welcomes Lloyd s efforts to provide practical and clear guidance which is appropriate for the operation of the Market and which meets the expectations of the FCA FCA the FCA will take [the standards] into account when considering its supervisory approach to Lloyd s managing agents Territorial scope (CR1/CR2 all customers. CR3 to CR 17 UK/EEA customers) Not specific/limited to consumers or retail business 54

55 Minimum standards Content of MS11 Conduct Risk 1. Fair treatment of Lloyd s customers Pay due regard to the interests of Lloyd s Customers and treat them fairly at all time 2. Role of the Board, management and staff 3. Product Oversight Group 4. Effective and proportionate product controls 5. Assessing and recording product risk HPR 6. Product design General 7. Product design High product risk 8. Obtaining assurance from others 9. Product sales 10. Product service 11. Handling and determining claims 12. Complaints 13. MI 14. Product Review 15. Distributor appointment, review and audit 16. TPAs 17. Training 55

56 Minimum standards CR11 Claims handling Controls to ensure handle claims fairly No unreasonable barriers to making claims Handle claims promptly and fairly and how they have been led to expect Not unreasonably reject a claim Not unreasonably terminate contract to reject a claim Settle claims promptly Reasonable guidance as to how to make a claim and appropriate information on progress Never routinely reject without investigation Delegation of claims must have not adverse effect on a Lloyd s customer CR16 Claims TPAs ICOBS 8 very clear on insurer s continued responsibility for claims handling Effective use of due diligence in respect of proposed TPAs A managing agent must establish and keep under review a programme for the audit of TPSs with regard to conduct risk 56

57 Minimum standards CR13 Claims Management Information MI to answer the question, Paying valid claims is the service we provide. Are we good at it? Number of claims Time taken to determine claims Claims initially denied / paid on escalation Time to settle once agreed MI standard requirements for HPR being agreed with LMA group (subject to testing with coverholders) CR3 Product Oversight Group Up to Managing Agent s Board as to whether to form one Composed of appropriate individuals to provide Customer Challenge 57

58 Minimum standards CR5 Assessing and recording product risk Customer risk Customer s ability to assess the product Up to and including reinsurer Product Complexity Novelty of product Complexity of documentation, terms used Time for reflection Sales risk (including distribution) Number of products intended to be sold Number of distributors Alignment of sales risks and incentives Implementation of product controls by distributors Add-on product? Via call centre or internet? Service risk Any other relevant factor 58

59 Minimum standards CR5 Assessing and recording product risk (cont d) Examples of products with high product risk: motor household accident & health legal expenses PPI extended warranty mobile phone/gadget insurance travel pet add-on products home emergency cover 59

60 Minimum standards Workshop exercise 15 minutes to discuss and rank the dummy policies in your pack 15 minutes for group feedback 60

61 Information sources

62 Information sources Helps in...identifying legal location of risk Quick and easy access to international regulatory and taxation requirements Monthly bulletins and What s new items Requires registration at lita@lloyds.com Risk Locator Tool Crystal News updates

63 Take-Aways The regulatory regime is in place to protect all stakeholders in the insurance process particularly policyholders and the financial system It is essential to be familiar with the guiding Principles for Business and the reasons for them and to put them into operation always Observance of the CII Code of Ethics reflects well upon the individual and the entity ICOBS 8 and TCF should be at the heart of all activity, particularly claims handling. In the event a complaint is received, it must be dealt with promptly fairly and effectively. Each employee should be familiar with their firm s complaints handling procedures and the operation of the FOS Investment in consistent appropriate Training and Competence (TC), at all levels, is not only mandatory, it is sound risk management, enjoyable, and a method of competitor distinguishment. Conversely, inadequate delivery of TC is a signal of management inadequacy, which may have reputational and balance sheet repercussions 63

64 Next Time Drafting and the Interpretation of Insurance Contracts Governing Law and Jurisdiction Dispute Resolution 64

65 United Airlines Broke My Guitar 65