SA intermediaries find representation on the global stage
It is critical that South African Intermediaries have representation among global policy makers or we face being at the receiving end of regulations we may not like. This is the message of incoming chairman of the World Federation of Insurance Intermediar
Casserly and Justus van Pletzen, current CEO of FIA, attended the WFII global meeting in March representing the African region, with an aim to actively participate in decision-making. This year, hot topics discussed were remuneration structures and the ongoing global trend towards more comprehensive financial consumer protection.
Casserly says that, to reinforce our relevance, we need to advocate for intermediation and consult widely with regulators. “We need to be the voice in this space,” he says. “The FSB, for example, is a serious player in the International Association of Insurance Supervisors (IAIS), which takes its mandate from the G20. The FIA needs to understand that debate and be able to contribute to it from a position of knowledge. South Africa punches above its weight, both in the IAIS and at the WFII, and it is important that we engage with all parties and learn from developments around the globe.”
He says South Africa is on the cutting edge of regulation and we are in a position to influence policy guidelines and frameworks, where appropriate. Regulators talk to one another through global organisations like the IAIS, which means that the FIA needs to anticipate regulatory invention and influence regulators on industry matters that impact on intermediation and the consumer.
Similar challenges across the globe
Intermediaries face similar challenges across the globe, including the issue of how to enhance customer experience. Some of these challenges will be familiar: TCF; remuneration; the liberalisation of markets etc.
“Direct writers aren’t limited by FAIS, for example – they can make exotic claims without being challenged. But Treating Customers Fairly (TCF) will directly impact on misleading marketing messages and balance the playing field,” predicts Casserly.
The remuneration debate is moving along and Casserly says the FIA has made numerous representations to the FSB regarding the pending Remuneration Distribution Review white paper, due later this year, and it fully supports the WFII position on fair intermediary remuneration.
Another working principle of the WFII is to further liberalise the insurance intermediary markets across the world. The short-term commercial insurance perspective illustrates this. Businesses have risk exposures in more than one country, and while some risks are placed individually in local markets others have to be covered on a master policy, which can include risks in many countries. Intermediaries need to find the best coverage protection for client risks, bearing in mind that they will be subjected to different regulations.
“South Africa is widely regarded as a market leader when it comes to product innovation,” says Casserly. “Our product is essentially intangible, and by its nature is portable and should facilitate and not hinder trade. Cross-border transactions are far more common these days and the accompanying insurance product cannot be the servant of regulatory red tape. We want to get trade facilitation on the Department of Trade and Industry’s agenda.”
Editor’s thoughts:
Having our intermediaries represented on a global stage will allow us to anticipate some of the issues that may arise in the future, as well as comment on proposed regulations. We can also learn from countries that have similar experiences to ours, like Canada and Columbia, for example. Casserly feels we don’t want to be in the position of having legislation imposed upon us, like the FAIS Act, which he says is narrow and paternalistic and often sees the intermediary being held up as the fall-guy. Do you agree? Comment below or email fiona@fanews.co.za
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