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Thursday, April 4, 2013

Is Your Bank-Insurance Business Ready for a Compliance Audit?

ABIA’s Compliance and Risk Management Best Practices Panel, co-chaired by Doug Harrison of BB&T and Brian Casey of Locke Lord, LLP, held a WebEx seminar last week that provided the basic information needed to prepare for a compliance audit. Chrys Lemon and Adam Maarec of McIntyre & Lemon, PLLC briefed listeners on the latest guidance from the Consumer Financial Protection Bureau (CFPB) and updates on several state insurance hot topics.

Companies need to document comprehensive Compliance Management Systems, which are typically comprised of:
  1. a compliance program that outlines policies and procedures, along with regularly scheduled monitoring of how they function in the market place; 
  2. board and management oversight of compliance efforts; 
  3. complaint responses; and
  4. compliance audits. 
The CFPB, unlike other banking regulators, focuses primarily on consumer experiences. As a result, robust policies and procedures are necessary but not sufficient. Companies also need to collect information on consumers’ experiences with their products and services and promptly react when problems are identified.

While the CFPB does not cover the business of insurance, compliance with state insurance laws should be integrated into a Compliance Management System. The session reviewed developments in agency licensing by line, the potential need for third party administrator licensing, rebating restrictions, privacy, premiums and commissions, and surplus lines.

ABIA members can view the PowerPoint deck.*

* Having troubles accessing this members-only document? Contact Deanne Mariño for help.