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Screening & Monitoring Changes at BridgeForce (March 2015)

This agenda outlines the new screening forms and questions, as well as the BridgeForce Compliance website and contracting issues. It also provides information on the impact on advisors and the MGA guidance, along with details on the BridgeForce Code of Conduct and enhanced monitoring.

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Screening & Monitoring Changes at BridgeForce (March 2015)

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  1. Screening and Monitoring Changes at BridgeForce March 2015

  2. Agenda • New forms • New questions • BridgeForce Compliance website • BridgeForce Contracting issues

  3. New Screening Forms • Screening Confirmation Request • Designed by insurers to allow MGAs to ask about advisors moving MGAs

  4. Questions Asked • 1. Status of the contractual relationship between insurer and advisor? • 2. Any unresolved debts with the insurer? Efforts to repay? • 3. If contract was terminated, would insurer consider re-contracting? • Has company investigated or reviewed a concern/complaint related to market conduct?

  5. New Screening Forms • Advisor Screening Questionnaire (ASQ) • Looks like the old CLHIA application for contract • Now asks you if you have • Documented AML program • Written privacy program • Written disclosure statement • Needs-based selling practices

  6. Impact on Advisors • You need to have all of these – these are old requirements • AML Compliance Regime – since 2008 • Privacy Program – since 2004 • Written disclosure statement – since 2004 • Needs-based selling practices – since the dawn of time (or 2005 when CCIR endorsed the CLHIA Approach)

  7. MGA Guidance • Having asked the questions, there may be legal exposure in doing nothing. • Advisors have 3 months from being contracted to get everything in place.

  8. BridgeForce Code of Conduct When you apply for a contract with an insurer through us, you will be asked to sign the Code and certify either that • 1. You are compliant OR • 2. You have gaps you have identified and you will repair them within 3 months. • At the end of 3 months, you will be asked again to certify that you are compliant. If you cannot, we contact the insurer for instructions.

  9. BridgeForce makes tools and templates available to you http://bridgeforcefinancial.com/toolbox/compliance/ - It’s all there for you – - Anti-Money Laundering Tools - Privacy Tools - Point of Sale Disclosure - Needs Analyses and KYC And plenty more than that!

  10. Enhanced Monitoring • MGAs are expected to engage in risk-based monitoring of advisors. • Where necessary, we may have to review your business. • You are expected to cooperate and produce records and files.

  11. Why should I allow this? • Regulators say insurers are responsible for the conduct of their agents – even independent agents. • Insurers delegate some of the responsibility to MGAs, who act on behalf of the insurers. • This is the regulatory framework we now all operate under.

  12. How will this be rolled out? • New screening documents are already being used. • Behind the scenes monitoring has always gone on.

  13. What about reviews? • BridgeForce does not intend to institute formal “audits” but will do some reviews and sampling in agent files to satisfy itself, insurers and regulators that • 1. It knows its advisors • 2. It takes reasonable efforts to detect and prevent fraud and unacceptable sales practices. • 3. It complies with Anti-Money Laundering and Anti-Terrorist Financing regulations.

  14. More on reviews • Most will be based on random selection • We hope to provide something in return, including pointers, sample material, templates to use.

  15. The upside? • Reviews can assist you in improving your practices and protecting you from unpleasant surprises. • BridgeForce has committed itself to helping advisors get compliant.

  16. BridgeForce Compliance Days are a big part of that • Please take part in the AML workshop this afternoon.

  17. Questions?

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