On July 11, 2014, the CSS published proposed changes to the rules for records regarding “undesirable practices and emerging regulatory gaps” highlighted since the rules were first published in 2012. The proposed amendments are currently in the public order. Until the entry into force of the new law on January 1, 2018, you only had to notify the FSB of material file contracts or terminations. You didn`t need to report all the files, which meant a lot of people got away with a lot of things. That has changed. The cap was introduced to mitigate a conflict of interest. The approach taken so far to set binder fees has not adequately taken into account the conflicts of interest that arise when an IMN performs a binder function on behalf of an insurer. Proposed amendments to the Long-Term Insurance Act (“LTIA”) For all other binders (UMAs and NMIS not eligible for consultation), the following requirements of Regulation 5.7 apply: As insurers, we must also give reasons to be satisfied with due diligence. At some point, there will likely need to be a key person within the insurance company, or certainly the person in charge of the files, who will have to sign a confirmation to the FSB that he or she is sure that the case holder can do the job. The determination of premiums is in itself a major problem. If you have a discount mandate, does this qualify or not for the determination of premiums? This is one of the unverified questions of the new rules to which there is no doubt that they will be answered in the coming months.
Whenever I receive a question from the regulator regarding a case holder, the first question they ask is: “Can we see evidence For everyone who attended the insurance regulatory seminar in November, it would have become more than clear for the regulator to take a firm stance when it comes to case agreements and outsourcing agreements. This is because of the resulting abuses that have taken place in this room over the years. If you only contract, amend or renew policies as part of your binder agreement, the cap will be set at 3.5%. If you add any of the other underwriting functions, i.e. determine the policy text and/or premium, you can have an additional 1.5% above the 3.5%, which is the 5%. Under the amended regulations, record holders authorized to provide advice under the Financial Advice and Intermediation Services Act (Fais) can receive a maximum remuneration of 9%. The fee is 3.5% for the conclusion, modification or extension of policies, which may be increased to 5% if the aforementioned functions include the definition of policy formulas, premiums or benefits. A provision of 4% is provided for the settlement of claims, while binder holders who only set formulations, premiums or benefits are not entitled to a fee. The total remuneration of the binder must be proportionate and proportionate to the costs of performing the binder function, taking into account the nature of the function and the resources, skills and competences necessary for the performance of the function. There must be no double counting.
Conflicts or potential conflicts with the interests of policyholders must be mitigated and payment must not impede the provision of fair results to policyholders. Now, an insurer must inform the Registrar in writing of the proposed record agreement at least 30 days before it is concluded. . . .