Compliance starts at the top

Compliance starts at the top

We’re six weeks in and the hunt to find the ultimate representative of the insurance industry continues.

The contestants have been on a rigorous journey that has put them to the ultimate professional test. The remaining contestants have shown grit, confidence, and brilliant insurance expertise. However, by the time the credits roll, there will only be three contestants moving on to the finale.

An influx of complaints
WeAreAfrican is a licensed (fictious) insurer in South Africa. The insurer is authorised to develop and distribute life insurance products namely: individual death and disability policies.

The insurer entered into a full binder and intermediary arrangement with ForthePeople, a Financial Service Provider (FSP), and subsequently developed a life insurance product offering specifically geared towards the lower income segment of the market.

This product offering initially seemed to be well received by the targeted communities. A year after the launch of this product, however, an influx of complaints against WeAreAfrican and ForthePeople was observed by the Financial Sector Conduct Authority (FSCA) and the Ombudsman For Long-Term Insurance (OLTI).

Claimants then struggled to have their complaints resolved by the insurer, so they resorted to escalating them to the FSCA and the OLTI. Based on the issues emanating from the complaints, the FSCA decided to increase its supervisory oversight over WeAreAfrican, flagging it as a high-risk insurer.

Upon consulting with the Prudential Authority (PA), the FSCA also learned that WeAreAfrican is about to be placed on heightened financial reporting as they are dangerously close to breaching their minimum capital requirements, and the PA has increasing concerns about the accuracy of their financial statements. It also appears that the current CEO approved several highly volatile investment transactions over recent years that have exacerbated the insurer’s deteriorating financial position. The PA was also informed that the CEO (who has been in the position for over 15 years) has tendered his resignation with immediate effect.

Embedding organisational culture
In episode six, sponsored by the FSCA, the contestants are appointed to take over as “CEO” of WeAreAfrican. This is in individual task, so they will act as the “CEO”. The insurer’s Board is concerned about the increasingly intrusive scrutiny from both the FSCA and the PA. They have been requested by the Board to design and implement a six-month remediation strategy and provide a roadmap for embedding a more customer-centric culture across the organisation within the next eighteen months.

For their first supervisory engagement with the FSCA leadership team, consisting of head judge, Simon Colman, resident judge Nox Dlamini, Managing Director at XonRisk and sponsor judge Farzana Badat, Deputy Commissioner of the FSCA, they had to provide an assessment of the key cultural drivers within the organisation that they believe have resulted in WeAreAfrican’s current predicament, outline the core elements of their roadmap for embedding a more customer-centric culture across the organisation, and estimate the time, resources and any other support that will be required to enable them to effectively fulfil their mandate as the “CEO”, etc.

Will the employees at WeAreAfrican be comfortable with their new “CEO’s” plan to save the business?

Watch it here
We would like to thank the FSCA for sponsoring episode six of The Insurance Apprentice 2023.

• To watch the episode on YouTube, click HERE
• To watch it on the website click HERE
• To watch it on Facebook, click HERE

Let us know who you think is most likely to be crowned The Insurance Apprentice 2023. Be sure to comment, like and share this episode. Be sure to tune in again, same time, same place, next week!