Page 156 - CFPA-SCR-Award in General Insurance W01_2018-19_Neat

10/4 W01/March 2018 Award in General Insurance

Highest ethical standards Honesty, trustworthiness and reliability underpin this section of the Code. It deals
and integrity with avoiding taking unfair advantage of a client, a colleague or a third party. It
prohibits the giving and receiving of gifts and benefits that imply, or appear to
imply, an improper obligation.
Members must also promote professional standards and encourage the use of
ethical codes within their firms.
This section also covers CII membership and the use of CII status. It includes a
requirement to advise the CII of material changes in circumstances that affect
either of these. Operating professionally extends to being financially responsible,
including the need to remain solvent.
Acting in the best interests of The fair treatment of clients is a key theme of the Code. Members should
each client encourage their firms to place the fair treatment of clients at the centre of their
corporate culture. Emphasis is placed on understanding and meeting client needs
and providing comprehensive information so that an informed decision can be
made by the client. Promises about product performance and after sales service
must be true. Confidentiality and the need to avoid conflicts of interest are also
dealt with.
High standard of service Communication with clients must be accurate and straightforward. Transparency
(including fees and other costs) and suitability are the main elements of this
section, which also emphasises the need for a member to ensure their knowledge
and expertise is kept up to date, meeting any CPD requirements.
Treating people fairly The focus of this section is the avoidance of unfair discrimination on grounds of
(non-discrimination) age, disability, gender reassignment, pregnancy and maternity, marriage and civil
partnership, race, religion or belief, sex or sexual orientation. It relates to the
equality and diversity laws in the member’s country. Rules require that each
person is treated as an individual and emphasise openness, fairness, respect and
opportunity.

Activity
Take a look at the CII Code of Ethics, in appendix 10.1, consider your everyday working life and measure your
approach to your work and actions against the principles (and the key questions posed) as far as they apply to your
job role.

B ‘Fit and proper’ requirements

To safeguard the interests of consumers, it is crucial that insurers are soundly and prudently managed,
Is crucial that
insurers are soundly and it is essential that individuals in key positions do not pose a risk to the interests of the insurer and
and prudently their stakeholders.
managed

B1 Risks of unsuitability
Research into the experience of insurers has demonstrated that a significant cause of financial
difficulties resulting in bankruptcies or ‘near misses’ can be problems with incompetence or operating
outside areas of expertise, lack of integrity or conflicting objectives, or weakness in the face of
inappropriate group decisions.
It is necessary therefore to set standards on fitness and propriety for ‘significant owners’ and ‘key
functionaries’, and for the assessment of the compliance with these standards, or ‘fit and proper’
testing, by regulators.
A significant owner is defined as a person (legal or natural) that directly or indirectly, alone or with an
associate, exercises control over the insurer.
Key functionaries are individuals defined by legislation, such as board members, directors and senior
management of an insurer, who must meet fit and proper requirements. The key functionaries identified
10 may differ depending on the structure of the insurer.
Chapter Performance of ‘fit and proper’ tests by regulators also helps address financial crime, such as money
laundering.