Regulatory Alerts2014-01-21
Official Information of 21 January 2014 on the Management and Control of Quality in an Insurance Company's Distribution Network
The Czech National Bank issued this official statement to establish standards for the management and control of quality within insurance companies' distribution networks. It requires insurers to implement robust internal control mechanisms, including rigorous due diligence for distributors, continuous monitoring of sales practices, and strict contractual obligations for cooperation with supervisory authorities. The regulation specifically addresses risks such as pyramid structures, mis-selling, and high-commission products by mandating proportional remuneration, centralized complaint handling, and the sharing of information regarding illegal or unethical distributor conduct.
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