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The Case for Self-regulation of Market Conduct. “Market conduct is specific to culture, legislation and taxation” Arguments in favour: Main distribution method Level of awareness of consumers Level of state provision of social security Countered by:
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The Case for Self-regulation of Market Conduct • “Market conduct is specific to culture, legislation and taxation” • Arguments in favour: • Main distribution method • Level of awareness of consumers • Level of state provision of social security • Countered by: • Growing regional markets (eg EU, Internet) • Globalisation of major insurance companies
Market Conduct – A personal view • What are the Options? • Global standards • Global principles and local standards • Global principles, local guidance and strong corporate governance
Market Conduct – A personal view 2001 Average 2002 Average Best in class Worst in class Business Unit “Buy-in” Recruitment of quantity not quality Fewer, more detailed business investigations Outsourcing of non core functions Risk based approach Compliant culture 100% fact find checking Continuous Improvement Company A 2002 Clarity of accountability and responsibility Company A 2001 Goal congruence Past business reviews Remuneration for compliant behaviour Specialist KPI “Dashboards” Standard KPI’s used
Market Conduct Questions and Comments
Closing remarks • The implementation of Principle 11 and the Principles paper will need to be addressed in the near future • The current regulatory models have drawbacks • The use of Self-regulation and Internal Market Conduct Assessment deserves further study.