Insurers and non-tied Financial Advisory Firms should work together to align and safeguard customers’ interests, including proper disclosures to customers

Singapore’s Insurance Culture and Conduct Steering Committee (ICCSC) has released its third paper ‘Intermediary Culture and Conduct Best Practices – Promoting Ethical Culture and Conduct in Insurance Intermediaries (Life)’.

The first two papers focusing on Human Resources and Corporate Governance were released in March 2022.

These papers are part of the Committee’s continued efforts to elevate the culture and conduct standards of the life insurance ecosystem in Singapore by focusing efforts on people, performance, and processes.

This third paper on ‘Intermediary Culture and Conduct Best Practices – Promoting Ethical Culture and Conduct in Insurance Intermediaries (Life)’ for life insurance intermediaries aims to enhance the quality of the financial advisory service sector through the practices of Financial Adviser Representatives (FA Reps) and Financial Advisory Firms (FAFs).

This paper provides:

• Guidance on the role of supervisors in setting the right tone from the top to ensure accountability from leadership that priorities are not only placed on achieving sales and revenue growth. Recommendations are aimed at strengthening industry practices in the three key areas of Supervisors’ Quality Indicators, Quality Management Framework, and Promotion Criteria for Supervisors.

• Best practices on establishing key performance measures that effectively encourage FA Reps to provide customers with high quality financial advisory services. Guidelines focus on calibrating and standardising industry practices in the areas of FA Reps’ Quality Indicators, Rewards and Recognition on Culture and Conduct, as well as Post-Sales Services to Customers.

• Collaboration on enhanced disclosures to customers and information sharing between insurers and non-tied Financial Advisory Firms (FAFs) to align and protect customers’ interests through regular engagements and dialogues with recommendations centred on Proper Disclosure to Customers on Products and Incentives, as well as the Sharing of Sales Quality Data to improve Culture and Conduct.

Dr Khoo Kah Siang, Chairperson of the Insurance Culture and Conduct Steering Committee (ICCSC), said: “This is an extension of the first two papers with a specific focus on intermediaries within the life insurance eco-system – from FA Reps to FAFs. Our aim is to enhance professionalism within the industry more consistently and elevate the standard of care for customers in the advisory process.”

These best practices build on the foundations of the Life Insurance Association Guidelines and complement current rules in the Financial Advisers Act, Insurance Act, and their subsidiary legislations.

About the Insurance Culture and Conduct Steering Committee (ICCSC)

The Monetary Authority of Singapore (MAS), the General Insurance Association of Singapore (GIA), the Life Insurance Association (LIA) and the Singapore Reinsurers’ Association (SRA), announced in December 2019 the establishment of the Insurance Culture and Conduct Steering Committee (ICCSC) to foster sound culture and strengthen standards of conduct among insurers in Singapore. The committee consists of senior leaders in the industry.

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