• 5. In your view, how can governance and culture of insurers and insurance intermediaries be influenced to better take into account conduct of business risks?
  • ⇒  ...customers may be satisfied with companies because they provide inexpensive products, but the customers may be misinformed about what is being sold. (p3)
• 6. We would like to include more examples from IAIS member jurisdictions to illustrate the various points made in the paper. Could you suggest practical examples illustrating the messages in the paper originating from your jurisdiction?
  • Another example is sales practices. There are regulatory protections regarding the suitability of products for those insured, appropriate consumer disclosures, replacements of one insurance product with another, and illustrations of expected future policy values.

• 7. Section 5 of the paper discusses the role supervisors can play in providing guidance relating to conduct of business risk. Could you suggest any examples of particular matters on which supervisory guidance could be useful?
  • The IAIS may want to consider providing additional details to the third bullet of paragraph 141 on page 29 on ways the supervisor could enhance customer awareness as a means of mitigating conduct of business risk.
  • We would suggest that such information could include a  straightforward, detailed comparison of the purpose, potential pros and cons, and a means of comparing the value of significant insurance products, etc.

2015 0501 - AAA to IAIS - Committee Comments to IAIS on Conduct of Business Risk Draft Paper, American Academy of Actuaries - 4p