Michael Sicsic

Fair value and product governance - August 2024 Thematic Review The FCA's publication, today is very clear - 'Firms should manufacture and distribute products that deliver fair value to customers. We’re disappointed to see many insurance firms are not fully meeting their product governance obligations.' Take this as a warning 🛑 It is - for the FCA - a pretty explosive statement 🧨 This is not 'could do better'. It's highlighting failure across a wide sector of the market... As well as reference to supervisory actions currently underway, following this review, the FCA flag their commitment to undertaking further action: 'Firms who still fail to fully meet their obligations in this area, and who cannot show that they are delivering fair value consistently, can expect us to intervene using the full range of our regulatory tools.' This thematic review focuses on the insurance market - but is relevant for other sectors - to interpret how these findings could apply to them. This could be the tip of the iceberg in terms of further thematic reviews... particularly now all relevant firms should have a Consumer Duty annual report and a years worth of management information for the FCA to request and review. https://lnkd.in/eMBY5eYD

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🚨 The FCA has released a review highlighting poor performance around Product Intervention and Product Governance Sourcebook (PROD) obligations in general and pure protection insurance markets. The review has found some firms struggled to demonstrate fair value to customers, particularly with insufficient product governance, poor fair value assessments (FVAs), and unclear target markets. The FCA’s review makes it clear that, whilst most firms have updated their policies, there is, in too many instances no evidence that those policies are being implemented robustly and with appropriate levels of challenge in practice. The FCA has clearly set out its intention to follow up on the failings it has found and that non-compliance could result in regulatory intervention. Read more👉 https://shorturl.at/k861D #FCA #compliance #performance

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A new section on risk matrix is now available in the ISN-ACT Toolkit ➡️ https://lnkd.in/evcNZKnA

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Course of the month for September is… ‘Product Oversight and Governance’! ⭐ Product governance and oversight is a topical subject, given the recently published FCA review (TR24/2) which revealed shortcomings and inconsistencies in firms in meeting PROD 4 product governance obligations for general insurance and protection products. Key issues included poor governance, oversight, and a lack of evidence that products deliver fair value and good outcomes for customers, posing a high risk of consumer harm. This course gives learners the opportunity to recap on key topics, and to: ✅ Recognise features of good product governance ✅ Identify relevant FCA rules concerning product oversight and governance ✅ Recognise the responsibilities of insurance product manufacturers and distributors. Development Zone users can access this course through the course catalogue. If you’re new to the system and want to know more, get in touch at [email protected] or sign up for a 14-day free trial https://lnkd.in/eXfZ4-YV #compliance #fca #brokers #intermediaries #cpd #insurancedistribution

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The European Insurance and Occupational Pensions Authority (EIOPA) has released the Pensions Funds Data Point Model and Taxonomy 2.9.0 hotfix. This #DPM and #XBRL taxonomy package is set to be used starting from the 1 January 2025 reference date. Read more about key changes introduced by the #Hotfix ➡: https://lnkd.in/dZGQ93Aa At BR-AG, we help our customers, pension funds and #insurance companies across the EU, stay well-prepared for all the #regulatory changes. We constantly track the regulatory landscape and promptly update our products for #taxonomy management and XBRL #reporting. If you need to comply with these pension funds regulatory requirements, prepare the submission data, and convert it into XBRL, contact us to see how our tools can streamline your reporting processes ➡: https://lnkd.in/dDe8pmk2

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UK, FCA published TR24/2: General insurance and pure protection product governance thematic review.... Firms should manufacture and distribute products that deliver fair value to customers. We’re disappointed to see many insurance firms are not fully meeting their product governance obligations. This report is for all manufacturers and distributors of: *general insurance products (excluding contracts of large risks and reinsurance) *pure protection products Product manufacturers and distributors in other sectors of the UK financial services industry may also find the report interesting; though PROD 4 is not applicable to other types of financial products, it is closely aligned with two of the outcomes under the Consumer Duty: price and value, and products and services. Key findings Many manufacturers are not adequately assessing and evidencing that their products deliver fair value and good outcomes. This means firms are not identifying any instances where their products are not delivering fair value for customers. Most distributors do not fully understand their responsibilities to consider their remuneration, its interaction with the services and benefits they provide, and its impact on the product’s value. These failings have can lead to harm as we’ve highlighted in our latest Value Measures publication and through our intervention on GAP insurance. https://lnkd.in/eu4_p59b [email protected] #UK #FCA #Generalinsurance #PROD #Compliance #Legal #Risk

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The European Insurance and Occupational Pensions Authority (EIOPA) has just released the Pensions Funds Data Point Model and Taxonomy 2.9.0 hotfix. This DPM and XBRL taxonomy package is set to be used starting from the 01/01/2025 reference date, aligning with EIOPA's ongoing information requests to NCAs regarding occupational pensions information. Currently, CoreFiling, alongside XBRL International, Inc. and Eurofiling members, is preparing to review this taxonomy and make it available to clients and partners. At CoreFiling, we ensure our customers are well-prepared for these updates in advance by configuring our products directly with regulator-released taxonomies. This approach eliminates development delays and is managed by our proactive, cross-functional team following a five-step process: intercept, test, repackage, create configuration items, and deploy. Our team swiftly identifies new taxonomies, rigorously tests them to prevent compliance issues, repackages them to resolve any conflicts, generates necessary configuration items, and finally deploys the taxonomies. This comprehensive method guarantees our customers seamless integration and usage in their reporting processes, ensuring readiness and compliance with minimal disruption. If you need to comply with these pensions funds regulatory requirements, please get in contact with us! https://lnkd.in/dFTdt2GR #EIOPA #TaxonomyUpdate #PensionFunds #CoreFiling #XBRL #Compliance #RegulatoryUpdates #Innovation #SeamlessIntegration

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Good vs poor practices under the Consumer Duty ⚖ The Financial Conduct Authority carried out a review across 20 firms in the insurance sector and published their findings in the latest paper. Our latest article summarises the key points ➡ https://lnkd.in/g_uM_FUm #FinancialServices #Insurance #ConsumerDuty

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In David Barnett FIA’s article – How to develop a more suitable #RiskManagement framework – he considers the evolving landscape of risk management within the #pensions industry. David explores the necessity of moving beyond traditional measures like Value at Risk (VaR) to address the complex risks faced today.   Blog highlights: 👉 Reality of risks: David discusses how frequent '1-in-20' risks actually occur and the importance of realistic risk expectations.  👉 The limitations of VaR: Why this once-standard metric may not be adequate for today’s diverse risk profile.  👉 Broader perspectives: Introducing more comprehensive methods like stress and scenario testing to capture a wider range of risks.  👉 Systemic solutions: Emphasising the need for a framework that recognises and manages both investment and non-investment risks to avoid systemic failures.  👉 Understanding these challenges is crucial for safeguarding the future. Read the article for insights into why we need a fresh approach and how it can lead to improved funding and reduced risk.   https://lnkd.in/ejvZVPfG   #Actuary #InvestmentRisks

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The DCRO Institute ~ CRMI Partnership - David R. Koenig, QRD® shares his thoughts on the impact of collaboration between the Chartered Risk Management Institute (CRMI) and the DCRO Institute. Read more on David's thoughts on this strategic collaboration here lnkd.in/ehWYrRK7. #RiskManagement #OrganizationalGovernance. #EnterpriseRiskManagement #ManagementCulture #RiskManagement #DCRO #CRMI #RiskMitigation

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The Microinsurance Network, a non-profit association, in partnership with the United Nations Development Programme’s Insurance and Risk Finance Facility (UNDP IRFF) has released the benchmark Landscape of Microinsurance Study. Published annually, the report provides unique insights on the microinsurance sector, delivering the most extensive data to date. Read more: https://lnkd.in/dKdQVgfk #Insurance #InsuranceNews

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Stress testing is an important forward-looking tool for financial risk managers, but to what extent? To better understand how #stresstesting is used for risk identification, measurement, and mitigation at today's financial services firms, GARP Benchmarking Initiative (GBI)® surveyed Financial Risk Manager (FRM®) Certified Professionals around the world for their insights. Read our newest #RiskSnapshot below. #riskmanagement #riskprofessionals #stresstesting #financialrisk #GARPFRM 

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Mind the scenario testing gap, operational resilience survey tells insurers. UK general insurers have maturity gaps in scenario testing, remediation planning and governance, according to an operational resilience survey of 35 insurance and investment firms. https://lnkd.in/eMCbAiH8

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The Pensions Regulator's new General Code, outlines expectations for good #pension scheme governance. Our Good Governance Guide explores the key aspects of scheme governance and practical steps for #trustees to comply with the Code and provide better outcomes for members. https://ow.ly/XWrF50S79rh #pensions #governance

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Risk managers - looking for quick commentary on the UK riots. What should businesses be aware of? What can risk managers do? What steps can organisations take to protect their employees? How can businesses generally prepare for events like these (particularly as the riots look likely to spread / move to new areas). Etc Either message me on here, or pop me an email on [email protected] #journorequest #riskmanagement

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The Financial Conduct Authority (FCA) has today published its Product Oversight and Governance thematic review report (TR24/2), which has important implications for firms in the general insurance.   It's fair to say that the FCA has expressed disappointment with widespread shortcomings in firms' compliance with PROD 4 obligations with many firms not adequately assessing and evidencing how their products deliver fair value and good outcomes. Some distributors have made limited progress in understanding their responsibilities under PROD 4.3 especially when considering the benefit of their activities to customers.   What this is likely to mean to firms is increased regulatory scrutiny. The FCA is likely to intensify its focus on product governance and fair value assessments. The regulator is considering supervisory and regulatory actions, including product withdrawals and skilled person reviews which is likely to result in firms and senior managers held accountable for failings that result in significant customer harm.   We strongly recommend that you review the full FCA report, which can be found on their website - https://lnkd.in/eMBY5eYD   If you have any questions about how this affects your firm or need assistance in reviewing your compliance with PROD 4, please don't hesitate to contact us.   We will continue to monitor developments in this area and provide updates as necessary. #fca #fairvalue #compliance #regluation #insurance #complianceconsultant #consumerduty

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The FCA's Thematic Review highlights the increased complexity of retirement income advice since the introduction of pension freedoms. We take a look at the role that Risk Capacity plays in this process and how it can be integrated - https://lnkd.in/eTim4NuU #BehaviouralFinance #BeFi #FinancialAdvice #FinancialPlanning #WealthManagement

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As of April 2023, UK firms are obliged to conduct a Proliferation Financing risk assessment either as part of their broader risk assessment or a standalone evaluation. However, identifying and mitigating the specific proliferation financing risks your organisation faces can be difficult and many firms struggle to implement appropriate policies, systems and additional controls. How can your organisation identify and mitigate Proliferation Financing risks? Here are 5 steps your organisation can take: https://lnkd.in/eyZCTtjF

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