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The role of the organization. “ QUO VADIS TUSSENGANGER? ” / “ QUO VADIS INTERMEDIARY? ”. Presented by: Brian van Flymen. The three strategic pillars. RECENT SUCCESSES. Pre-merger industry feedback - Negative. RECENT SUCCESSES. Pre-merger industry feedback - Negative 2008 FIA Dream.

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The role of the organization

“QUO VADIS TUSSENGANGER?” / “QUO VADIS INTERMEDIARY?”

Presented by: Brian van Flymen



Recent successes
RECENT SUCCESSES

  • Pre-merger industry feedback - Negative


Recent successes1
RECENT SUCCESSES

  • Pre-merger industry feedback - Negative

  • 2008 FIA Dream


Recent successes2
RECENT SUCCESSES

  • Pre-merger industry feedback - Negative

  • 2008 FIA Dream

  • Insurance Laws Amendment Act – Parliament 2008


Recent successes3
RECENT SUCCESSES

  • Pre-merger industry feedback - Negative

  • 2008 FIA Dream

  • Insurance Laws Amendment Act – Parliament 2008

  • Binder agreements / Secure income streams for brokers


Recent successes4
RECENT SUCCESSES

  • Pre-merger industry feedback - Negative

  • 2008 FIA Dream

  • Insurance Laws Amendment Act – Parliament 2008

  • Binder agreements / Secure income streams for brokers

  • RE Level 1 exams / Member support / Pass mark / Afrikaans / Format


Recent successes5
RECENT SUCCESSES

  • Pre-merger industry feedback - Negative

  • 2008 FIA Dream

  • Insurance Laws Amendment Act – Parliament 2008

  • Binder agreements / Secure income streams for brokers

  • RE Level 1 exams / Member support / Pass mark / Afrikaans / Format

  • RE Level 2 exams / In limbo until after house is in order


Recent successes6
RECENT SUCCESSES

  • Pre-merger industry feedback - Negative

  • 2008 FIA Dream

  • Insurance Laws Amendment Act – Parliament 2008

  • Binder agreements / Secure income streams for brokers

  • RE Level 1 exams / Member support / Pass mark / Afrikaans / Format

  • RE Level 2 exams / In limbo until after house is in order

  • Health Care fees / FIA Approach Minister of Health Office


Recent successes7
RECENT SUCCESSES

  • Pre-merger industry feedback - Negative

  • 2008 FIA Dream

  • Insurance Laws Amendment Act – Parliament 2008

  • Binder agreements / Secure income streams for brokers

  • RE Level 1 exams / Member support / Pass mark / Afrikaans / Format

  • RE Level 2 exams / In limbo until after house is in order

  • Health Care fees / FIA Approach Minister of Health Office

  • Sasria Commission


Recent successes8
RECENT SUCCESSES

  • Pre-merger industry feedback - Negative

  • 2008 FIA Dream

  • Insurance Laws Amendment Act – Parliament 2008

  • Binder agreements / Secure income streams for brokers

  • RE Level 1 exams / Member support / Pass mark / Afrikaans / Format

  • RE Level 2 exams / In limbo until after house is in order

  • Health Care fees / FIA Approach Minister of Health Office

  • Sasria Commission

  • Section 156 Interest on premium


Recent successes9
RECENT SUCCESSES

  • Pre-merger industry feedback - Negative

  • 2008 FIA Dream

  • Insurance Laws Amendment Act – Parliament 2008

  • Binder agreements / Secure income streams for brokers

  • RE Level 1 exams / Member support / Pass mark / Afrikaans / Format

  • RE Level 2 exams / In limbo until after house is in order

  • Health Care fees / FIA Approach Minister of Health Office

  • Sasria Commission

  • Section 156 Interest on premium

  • Human Capital Project / FIA, SAIA, IISA, FSB / Industry Roadmap


Recent successes10
RECENT SUCCESSES

  • Pre-merger industry feedback - Negative

  • 2008 FIA Dream

  • Insurance Laws Amendment Act – Parliament 2008

  • Binder agreements / Secure income streams for brokers

  • RE Level 1 exams / Member support / Pass mark / Afrikaans / Format

  • RE Level 2 exams / In limbo until after house is in order

  • Health Care fees / FIA Approach Minister of Health Office

  • Sasria Commission

  • Section 156 Interest on premium

  • Human Capital Project / FIA, SAIA, IISA, FSB / Industry Roadmap

  • Code of Conduct / Perceptional change


Recent successes11
RECENT SUCCESSES

  • Pre-merger industry feedback - Negative

  • 2008 FIA Dream

  • Insurance Laws Amendment Act – Parliament 2008

  • Binder agreements / Secure income streams for brokers

  • RE Level 1 exams / Member support / Pass mark / Afrikaans / Format

  • RE Level 2 exams / In limbo until after house is in order

  • Health Care fees / FIA Approach Minister of Health Office

  • Sasria Commission

  • Section 156 Interest on premium

  • Human Capital Project / FIA, SAIA, IISA, FSB / Industry Roadmap

  • Code of Conduct / Perceptional change

  • FSB realize that FIA Members are more informed


Recent successes12
RECENT SUCCESSES

  • Pre-merger industry feedback - Negative

  • 2008 FIA Dream

  • Insurance Laws Amendment Act – Parliament 2008

  • Binder agreements / Secure income streams for brokers

  • RE Level 1 exams / Member support / Pass mark / Afrikaans / Format

  • RE Level 2 exams / In limbo until after house is in order

  • Health Care fees / FIA Approach Minister of Health Office

  • Sasria Commission

  • Section 156 Interest on premium

  • Human Capital Project / FIA, SAIA, IISA, FSB / Industry Roadmap

  • Code of Conduct / Perceptional change

  • FSB realize that FIA Members are more informed

  • Broker mandates / direct writers as well as no agreements


Recent successes13
RECENT SUCCESSES

  • Pre-merger industry feedback - Negative

  • 2008 FIA Dream

  • Insurance Laws Amendment Act – Parliament 2008

  • Binder agreements / Secure income streams for brokers

  • RE Level 1 exams / Member support / Pass mark / Afrikaans / Format

  • RE Level 2 exams / In limbo until after house is in order

  • Health Care fees / FIA Approach Minister of Health Office

  • Sasria Commission

  • Section 156 Interest on premium

  • Human Capital Project / FIA, SAIA, IISA, FSB / Industry Roadmap

  • Code of Conduct / Perceptional change

  • FSB realize that FIA Members are more informed

  • Broker mandates / direct writers as well as no agreements

  • FSGLAB / Institutional failure


Recent successes14
RECENT SUCCESSES

  • Pre-merger industry feedback - Negative

  • 2008 FIA Dream

  • Insurance Laws Amendment Act – Parliament 2008

  • Binder agreements / Secure income streams for brokers

  • RE Level 1 exams / Member support / Pass mark / Afrikaans / Format

  • RE Level 2 exams / In limbo until after house is in order

  • Health Care fees / FIA Approach Minister of Health Office

  • Sasria Commission

  • Section 156 Interest on premium

  • Human Capital Project / FIA, SAIA, IISA, FSB / Industry Roadmap

  • Code of Conduct / Perceptional change

  • FSB realize that FIA Members are more informed

  • Broker mandates / direct writers as well as no agreements

  • FSGLAB / Institutional failure

  • Value of the intermediary (FIA) / Level playing fields


Recent successes15
RECENT SUCCESSES

  • Pre-merger industry feedback - Negative

  • 2008 FIA Dream

  • Insurance Laws Amendment Act – Parliament 2008

  • Binder agreements / Secure income streams for brokers

  • RE Level 1 exams / Member support / Pass mark / Afrikaans / Format

  • RE Level 2 exams / In limbo until after house is in order

  • Health Care fees / FIA Approach Minister of Health Office

  • Sasria Commission

  • Section 156 Interest on premium

  • Human Capital Project / FIA, SAIA, IISA, FSB / Industry Roadmap

  • Code of Conduct / Perceptional change

  • FSB realize that FIA Members are more informed

  • Broker mandates / direct writers as well as no agreements

  • FSGLAB / Institutional failure

  • Value of the intermediary (FIA) / Level playing fields

  • Exco member of WFii – IAIS Access


Recent successes16
RECENT SUCCESSES

  • Pre-merger industry feedback - Negative

  • 2008 FIA Dream

  • Insurance Laws Amendment Act – Parliament 2008

  • Binder agreements / Secure income streams for brokers

  • RE Level 1 exams / Member support / Pass mark / Afrikaans / Format

  • RE Level 2 exams / In limbo until after house is in order

  • Health Care fees / FIA Approach Minister of Health Office

  • Sasria Commission

  • Section 156 Interest on premium

  • Human Capital Project / FIA, SAIA, IISA, FSB / Industry Roadmap

  • Code of Conduct / Perceptional change

  • FSB realize that FIA Members are more informed

  • Broker mandates / direct writers as well as no agreements

  • FSGLAB / Institutional failure

  • Value of the intermediary (FIA) / Level playing fields

  • Exco member of WFii – IAIS Access

  • President of WFii


Recent successes17
RECENT SUCCESSES

  • Pre-merger industry feedback - Negative

  • 2008 FIA Dream

  • Insurance Laws Amendment Act – Parliament 2008

  • Binder agreements / Secure income streams for brokers

  • RE Level 1 exams / Member support / Pass mark / Afrikaans / Format

  • RE Level 2 exams / In limbo until after house is in order

  • Health Care fees / FIA Approach Minister of Health Office

  • Sasria Commission

  • Section 156 Interest on premium

  • Human Capital Project / FIA, SAIA, IISA, FSB / Industry Roadmap

  • Code of Conduct / Perceptional change

  • FSB realize that FIA Members are more informed

  • Broker mandates / direct writers as well as no agreements

  • FSGLAB / Institutional failure

  • Value of the intermediary (FIA) / Level playing fields

  • Exco member of WFii – IAIS Access

  • President of WFii

  • FIA Awards / Industry benchmark


Burning issues
BURNING ISSUES

  • Remuneration


Burning issues1
BURNING ISSUES

  • Remuneration

  • RE2


Burning issues2
BURNING ISSUES

  • Remuneration

  • RE2

  • CPD


Burning issues3
BURNING ISSUES

  • Remuneration

  • RE2

  • CPD

  • Pro-intermediary Campaign


Burning issues4
BURNING ISSUES

  • Remuneration

  • RE2

  • CPD

  • Pro-intermediary Campaign

  • Demarcation Health Products


Realities
REALITIES

  • Regulation

  • Commoditisation – Consumerism

  • Value of the intermediary (lack – perception)

  • Image and Reputation

  • Wfii

  • IAIS

    • Core principles 18/24


Communication how
COMMUNICATION (HOW)

  • Technology

  • New Connect

    • Daily

    • Weekly – Indaba

    • Monthly – Inform

  • Selective – What is relevant for me

  • One consistent message through structures

  • Regional Coordinators

  • Branches

  • Regional Conferences


Representation what
REPRESENTATION (WHAT)

Threats (Reality or Perception)

  • October 2004 (FAIS)

  • 14700 FSPs

  • July 2012

  • 10750 FSPs

  • 3206 Cancelled

  • Consolidation

  • Retire/ Leave the industry

  • Fraud (minority)


Representation what1
REPRESENTATION (WHAT)

  • New entrants (Human Capital Initiative

  • Level playing fields

  • Direct

  • Aggregators

  • Economy (Section 8)

  • Banks (One fits all)

  • FAIS Ombud determinations (Due diligence)

  • COSTS……………

  • Image and Reputation

  • Remuneration

  • Education – (In general)

  • Transformation


Representation what2
REPRESENTATION (WHAT)

  • New entrants (Human Capital Initiative

  • Level playing fields

  • Direct

  • Aggregators

  • Economy (Section 8)

  • Banks (One fits all)

  • FAIS Ombud determinations (Due diligence)

  • COSTS……………

  • Image and Reputation

  • Remuneration

  • Education – (In general)

  • Transformation


Twin peaks
TWIN PEAKS

  • National Treasury - Prudential

  • FSB – Conduct

  • CMS

  • Inseta

  • SAM

  • TCF

  • FSGLAB

  • Binder Regulations


Challenges
CHALLENGES

  • Capacity to represent all disciplines in the industry

  • Our own worst enemy

  • Trust the leaders you elect and believe in them




FSA (UK) (TCF

The FSA began studying the TFC programme in 2000,

published its first paper in 2001, and the programme

was officially launched in 2005.

Realties in the UK:

A change of mindset of the industry

Clarity of regulatory expectations

Education to encourage consumer responsibility

A supervisory approach that is pre-emptive and intensive

Enforcement and compliance


Product life cycle
Product life cycle (TCF

Cultural Framework


Desired outcomes
Desired Outcomes (TCF

Developing products for specific target markets, based on a clear understanding of the likely needs and financial capability of each group of customers


Desired outcomes1
Desired Outcomes (TCF

Marketing products for specific target markets, based on a clear understanding of the likely needs and financial capability of each group of customers

Communicating clearly and fairly the nature of the product before the consumer is “locked in”.


Desired outcomes2
Desired Outcomes (TCF

Balancing the commercial objective of increasing sales with the objectives of Treating customers fairly.

With assessment, offering suitable alternatives to consumers.


Desired outcomes3
Desired Outcomes (TCF

Providing clear and appropriate information, making charges transparent.

Being clear to customers about what the firm, its products and services offer.


Desired outcomes4
Desired Outcomes (TCF

Monitoring and responding appropriately to changes in the wider environment that may affect products and impact on particular classes of new or existing customers.


Desired outcomes5
Desired Outcomes (TCF

Honouring representations, assurances and promises that lead to legitimate customer expectations.

Identifying common underlying causes of complaints and taking action to eliminate the root cause.


Culture change six key drivers
Culture Change: Six Key Drivers (TCF

  • Leadership

  • Strategy

  • Decision making

  • Controls

  • Recruitment, training and competence

  • Reward


Fsb s tcf initiative
FSB’s TCF initiative (TCF

  • FSB published a TCF discussion paper at the end of April 2010 which introduces TCF concept and contextualises it by dealing with specific examples

  • Stakeholder workshops to debate TCF

  • Cross-sectoral task team

  • External consultant

  • FSA Stakeholder Workshop

  • Considering comments received


Key elements
Key elements (TCF

  • Culture Change

  • Fair treatment at the heart of company’s business

  • NOT a compliance function

  • Ownership of TCF should rest at Board and Senior Management level

  • Board/Senior Management must embed culture of TCF at all levels of organisation

  • Further guidance on TCF culture framework and a self-assessment tool will be published


Key elements1
Key elements (TCF

  • Revisiting the regulatory framework

  • Challenges of rules based approach vs outcomes based approach to regulation

  • Combination of rules/principles in regulation so that the ‘spirit’ of what the regulator wants to achieve is made clear

  • Gap analysis of legislation of FSB to determine if all elements of TCF are adequately covered and to ensure alignment across sectors.

  • Guidance notes on TCF best practice will be published


Key elements2
Key elements (TCF

  • Revisiting the supervisory approach to market conduct

  • Reactive approach vs proactive approach

  • Increased focus on thematic on-site visits / testing of outcomes on the ground (for instance by way of mystery shopping)

  • Creating the right incentives

  • Relying on financial institution to do the right thing : TCF not likely to succeed

  • Visible enforcement of TCF principles, increased probability of detection, higher cost of non-compliance (steep penalties)

  • Enforcement Committee

  • Other forms of redress


Key elements3
Key elements (TCF

  • Consumer Education and Co-ordination with Ombuds

  • Consumers also have a responsibility to understand rights/obligations

  • TCF and Consumer Education must go hand in hand –

    - Asymmetry of information

    - Generally complex nature of financial products

    - Consumer Education Department


Next steps
Next Steps (TCF

  • Roadmap document

    • Evaluation of comments and setting out what FSB will do next and how

    • Published by year-end

  • Self-assessment pack

    • Briefing document

    • Self-assessment tool

    • Initial focus on product providers

    • Piloted process, published for industry to use

  • Benchmark study

    • Survey of firms based on self-assessment tool

    • Interviews with firms

    • Publication of assessment and report

  • Supervisory Gap Sub Committee

  • Regulatory Gap Sub Committee


Conclusion
Conclusion (TCF

  • TCF aims to elevate fair treatment of consumers on agendas of financial institutions.

  • Behavioural change will be a multiyear project

  • After consideration of comments on discussion paper-

  • Issuance of more detailed guidance on what the FSB expects of firms in applying TCF.

  • Obligation will be on Board/Senior Management to undertake a TCF self-assessment


Thank you (TCF


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