FMA to tackle oversight gaps
05 Sep 2017
Financial Markets Authority (FMA) will examine gaps in insurance sector oversight after issues were identified by an International Monetary Fund (IMF) assessment.
Considering options for addressing the gaps is among objectives for this financial year, the regulator says in its annual corporate plan.
The IMF assessment, released in May, took account of an overhaul in regulation in recent years, including establishment of the FMA, but made a number of recommendations for improvement across the financial sector.
The FMA’s aims this year also include examining “harms in the insurance market”, such as conflicted sales practices.
“We want to continue to raise standards of conduct and encourage customer-centric practices in sales and advice of insurance products, highlighting deficiencies in practices,” the plan says.
The regulator will study vertically integrated groups and conflicted business models, including incentives and sales processes, and examine conflict management policies and procedures.
Cyber issues are also on the agenda, with the FMA to develop its approach towards businesses and markets it regulates.
“We will clarify the assurances we need from these entities about what processes, systems and controls they have in place to enhance their cyber resilience. We will take into account their differing nature and the interests and activities of other agencies that may have a role to play.”
The FMA says it wants to see businesses put customer interests first through product design, distribution, value for fees charged and product selection and advice.