RegAlert2026-03-11 | 38875Added
Industry Review of the July 2022 Draft Market Conduct Guideline for Registrants Under the Insurance Act, 2018
The Central Bank of Trinidad and Tobago responds to industry comments on the July 2022 draft Market Conduct Guideline for registrants under the Insurance Act, 2018. The regulator maintains that definitions and fair treatment requirements apply to all classes of insurance business, rejecting industry requests to limit them to long-term insurance or exempt general insurance. Specific amendments include rewording section 5.1.1(B) to require registrants to periodically assess their fair treatment strategy and clarifying that senior management must ensure policies are implemented. The Central Bank also clarifies that anti-money laundering regulations do not prohibit access for vulnerable groups, citing simplified KYC measures for premiums of $6,000 or less, and adjusts product suitability language to specify that insurers should develop products for economically vulnerable groups.
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INDUSTRY REVIEW OF THE JULY 2022 DRAFT MARKET CONDUCT GUIDELINE FOR REGISTRANTS UNDER THE INSURANCE ACT, 2018
Definitions
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| 4.2 | Other terms used in this Guideline have the meaning as follows | Definitions for "advice", "policy servicing" and "proposal" do not appear to be applicable to general insurance. If they only apply to long term insurance, then this should be clearly stated as was done for the definition of "replacement". | Definitions for "advice", "policy servicing" and "proposal" apply to all classes of insurance business. No change. |
Fair Treatment of Consumers
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| 5.1.1 (A) | Organizational Culture of Fair Treatment (a) The Board of Directors ("Board") and Senior Management should set the "tone at the top" by establishing a culture of fair treatment throughout the business. Business strategy, product design, product distribution and performance measures should be guided by the need to ensure the fair treatment of consumers. The Board and Senior Management should ensure that the registrant: (i) provides information to consumers (pre-, during, and post-sale) that is accurate clear and not misleading; (ii) minimizes the risk of sales that are inappropriate for consumers' needs and objectives; (iii) offers advice that is commensurate with the needs of the consumer; (iv) addresses claims, complaints and disputes promptly; and (v) protects and safeguards consumers’ information. | These sections do not seem particularly relevant to general insurance | The organizational culture of fair treatment also applies to general insurance business. No change. |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| 5.1.1 (B) | The Board should ensure that the registrant has an approved market conduct strategy or policy and Senior Management should identify SMART objectives and targets against which the registrant’s and staff’s performance on good market conduct and fair treatment will be tracked. Registrants should assess the effectiveness and progress of its fair treatment strategy or policy by including it in the internal audit’s scope of work and its internal audit’s plan. | (1) The structure suggested is rigid and impractical for small and medium Brokerage Houses where the day to day activity of the firm is NOT removed from the "Senior Management".<br>(2) This is also redundant as these "good market practices" are engrained in the Associations Member Code of Conduct to which each Broker subscribes.<br>(3) Furthermore, this section is bordering on usurping the responsibilities of the CBTI as the market regulator. History has taught us that there are limits to "self-regulation" and that this "market conduct" inspection is better in the domain of the Associations/regulator. | If not already a member of, and ergo governed by, the code of Ethics of their Professional Association (ATTIC, IBATT and the Association of Adjusters), The Board should ensure that the registrant has an approved market conduct strategy or policy and Senior Management should identify SMART3 objectives and targets against which the registrant’s and staff’s performance on good market conduct and fair treatment will be tracked. Registrants should assess the effectiveness and progress of its fair treatment strategy or policy by including it in the internal audit’s scope of work and its internal audit’s plan. | The regulator's guidelines allow for all registrants to have a common standard of operation. It may be the case that the professional associations may also need to update their code of ethics to ensure congruence with the Guideline. Please note that members of other professional associations also have a code of ethics/conduct but are also required to adhere to the Central Bank's Market Conduct Guideline.<br>This section has been reworded to state: Registrants should "periodically" assess the effectiveness and progress of its fair treatment strategy or policy by including it in the internal audit’s scope of work and its internal audit’s plan. |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| 5.1.1 (C) | The management of registrants where applicable should communicate to all stakeholders that fair treatment of consumers is a priority. Senior Management should implement the required policies, procedures, controls and systems that ensure the fair treatment of consumers. The systems and controls implemented should facilitate monitoring of, and reporting on, compliance with approved market conduct policies and consumer redress mechanisms. | Same comment as in 5.1.1. (B) above. Recommend that rather than implementing this at a "Board level" there is room for this to be an institution/association "system and control" through the code of conduct. | The management of registrants where applicable should communicate to all stakeholders that fair treatment of consumers is a priority. If not already a member of, and ergo governed by, the code of Ethics of their Professional Association (ATTIC, IBATT and the Association of Adjusters), Senior Management should encourage the required policies, procedures, controls and systems that ensure the fair treatment of consumers. The systems and controls implemented should facilitate monitoring of, and reporting on, compliance with approved | A general comment has been inserted in the Guideline to state that where the registrants have adopted these codes, there should be a review to ensure alignment with the requirements of the Guideline. Where gaps are identified, the registrant should take the necessary steps to ensure compliance with the Guideline.<br>This section has been reworded to state: Senior Management should "ensure that" the required policies, procedures, controls and systems that ensure the fair treatment of |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| market conduct policies and consumer redress mechanisms. If already a member of, and ergo governed by, the code of Ethics of their Professional Association (ATTIC, IBATT and the Association of Adjusters) Senior Management of registrants should promote within their firms awareness of the Code of Ethics and redress mechanisms available as a result of said membership. | consumers “are implemented”. The systems and controls implemented should facilitate monitoring of, and reporting on, compliance with approved market conduct policies and consumer redress mechanisms. |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| 5.1.1 (D) | All decisions impacting consumers should undergo adequate scrutiny to ensure that the goal of fair treatment is achieved. | ALL - Vague and therefore unhelpful. Would not recommend that this process is formalized...this speaks to the "Ethics" training that Intermediaries are required to undertake…unless this "fair treatment" is a culture within the sector, it is pointless to codify it. | Decisions impacting consumers should undergo scrutiny to ensure that the goal of fair treatment is achieved. | This section has been reworded to state: “Decisions impacting consumers should undergo adequate scrutiny to ensure that the goal of fair treatment is achieved.” |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| 5.1.1 (G) | Registrants should ensure that all Board approved policies and relevant procedures for the fair treatment of consumers are available to all employees in a central and easily accessible location. | See comments in 5.1.1. (B) and (C):<br>(1) The structure suggested is rigid and impractical for small and medium Brokerage Houses where the day to day activity of the firm is NOT removed from the "Senior Management".<br>(2) This is also redundant as these "good market practices" are engrained in the Associations Member Code of Conduct to which each Broker subscribes.<br>(3) Furthermore, this section is bordering on usurping the responsibilities of the CBTI as | If not already a member of, and ergo governed by, the code of Ethics of their Professional Association (ATTIC, IBATT and the Association of Adjusters), Registrants should ensure that all Board approved policies and relevant procedures for the fair treatment of consumers are available to all employees in a central and easily accessible location. | The regulator's guidelines allow for all registrants to have a common standard of operation. It may be the case that the professional associations may also need to update their code of ethics to ensure congruence with the Guideline. Please note that members of other professional associations also have a code of ethics/conduct but are also required to adhere to the Central Bank's Market Conduct Guideline. |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| the market regulator. History has taught us that there are limits to "self-regulation" and that this "market conduct" inspection is better in the domain of the Associations/regulator.<br>Recommend that rather than implementing this at a "Board level" there is room for this to be an institution/association "system and control" through the code of conduct. |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| 5.1.1 (H) | Registrants should have a board approved remuneration policy. Remuneration packages should restrict incentives and inducements to effectively negate and neutralize any possible self-interest. Reward and remuneration structures should incorporate quality driven performance, such as consumer satisfaction indices and not be predominantly dependent on the volume of sales. | (1) This wording/section belies any knowledge of how the Brokerage and Insurance industry (Worldwide) remunerates Brokerage intermediaries (entirely on commission). By extension, since our income is commission driven, it is completely impractical to remove commission based incomes.<br>(2) Impractical for most Brokerage Houses where the staff total is very small. | Registrants with over 25 registered intermediaries should have a board approved remuneration policy. Remuneration packages should restrict incentives and inducements to effectively negate and neutralize any possible self-interest. Reward and remuneration structures where possible should incorporate quality driven performance, such as consumer satisfaction indices. | The Central Bank's expectation is that all registrants, whether small or large, focus on operating with ethics, achieving customer satisfaction and being transparent in its approach. No change. |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| 5.1.2 (a) | Monitoring of Fair Treatment (a) Management of corporate/incorporated registrants should utilize different tools to monitor the fair treatment such as performance surveys, complaints analysis and even mystery shopping. Feedback from consumer surveys (post service, annual | Comment (A): This is more appropriately only addressed to Insurers only given that much of what is references is not in the Broker's or Adjuster's control.<br>Comment (B): While various methods were identified to monitor fair treatment, the | (A)Monitoring of Fair Treatment (a) Management of corporate/incorporated Insurer registrants should utilize different tools to monitor the insurer’s fair treatment such as performance surveys, complaints analysis and | Response to (A): This is only applicable to insurers if the consumer deals solely with insurers. As the brokerage is the interface, this requirement also applies. In this regard we have removed the word “insurer’s” so that the requirement will be applicable to all registrants. |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| suggestions are broad. Is there a suggested minimum measurement, standard or consistent application suggested for the industry (number of methods/measurments, frequency of surveys)? If insurers are to determine this, what is considered reasonable given resources by insurers are not infinite? | even mystery shopping. Feedback from consumer surveys (post service, annual surveys, and product specific surveys), social media ratings and market intelligence activities can be used to gauge consumer satisfaction. Other activities such as training and awareness initiatives, repeat consumers’ recommendations, complaints and other feedback portals can be the source to identify the level of perception of fair treatment and the need for corrective action. | The Section now states: “(a) Management of corporate/incorporated registrants should utilize different tools to monitor the fair treatment of consumers such as, performance surveys, complaints analysis and even mystery shopping.”<br>Response to (B): No minimum criteria or timeframe is established, the organisation should decide what is reasonable. Conduct of consumer and performance surveys are important tools to gauge customer satisfaction. Consequently, senior management of the institutions should determine the desired nature and frequency of the surveys to be undertaken based on knowledge of its business. |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| 5.1.2 (b) | Management reports should monitor the progress of changing the “fair treatment culture” in the establishment both as perceived by consumers and actual evidence. These reports should include corrective actions, activities and initiatives undertaken by the entity that will support the fair treatment culture e.g. retreats, training and even social activities that entrench its core principles and objectives. | Comment (A): Same comment as in 5.1.2 (a) above<br>Comment (B): Management reports should monitor the progress of changing the “fair treatment culture”. “Changing” may imply this treatment is non-existent or adverse in this context and should be reworded to better describe the state or intent regarding fair treatment. Possibly consider enhancing or improving. | (A)Insurer’s Management reports should monitor the progress of changing the “fair treatment culture” in the establishment both as perceived by consumers and actual evidence. These reports should include corrective actions, activities and initiatives undertaken by the entity that will support the fair treatment culture e.g. retreats, training and even social activities that entrench its core principles and objectives. | Response to (A): See comment to 5.1.2(a) above.<br>Response to (B): Agreed. Suggested amendment “Management should monitor and report on the progress of the “fair treatment culture” in the establishment both as perceived by consumers and actual evidence.”<br>“These reports should include corrective actions, activities and initiatives undertaken by the entity that will support the fair |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| treatment culture, where applicable, e.g. retreats, training and even social activities that entrench its core principles and objectives.” |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| 5.1.2 (c) | Registrants, where applicable, should have board-approved procedures in place to assess the product risks and identify targeted consumers based on appetite, need and objective. Assessments of compliance with procedures and market conduct principles should be conducted and documented at the end of the developmental stages of a product. | Same comment as in 5.1.2 (a) above | Insurer Registrants, where applicable, should have board-approved procedures in place to assess the product risks and identify targeted consumers based on appetite, need and objective. Assessments of compliance with procedures and market conduct principles should be conducted and documented at the end of the developmental stages of a product. | This is only applicable to insurers if the consumer deals solely with insurers. As the brokerage is the interface, this requirement also applies. In this regard we have removed the word “insurer’s” so that the requirement will be applicable to all registrants. |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| 5.1.2 (d) | The Board shall, ensure that effective controls are put in place to ensure that they can attest to the fair treatment and suitability of advice in order to mitigate the risk of mis-selling. All proposals and sales should be monitored by Management to ensure suitability of the advice and the product. | This does not seem applicable to general insurance.<br>Also, why is attestation (fair treatment and suitability of advice) required at Board level as opposed to management providing attestation to the Board? To whom would the Board be making this attestation? | The Board is ultimately responsible for ensuring effective controls, policies and procedures are in place.<br>We have removed the words “that they can attest to”. The section now states: “The Board shall, ensure that effective controls are put in place to ensure the fair treatment and suitability of advice in order to mitigate the risk of mis-selling. All proposals and sales should be monitored by Management to ensure suitability of the advice and the product.” |
Product Suitability and Inclusiveness
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| Registrants should recommend and sell products and services that are suitable for the | (1) It is oft CBTT’s AML/CFT/PF Controls that currently prohibit Insurers/Brokers from | Registrants should recommend and sell products and services that are suitable for the | The Central Bank disagrees that AML/CFT/PF controls prohibit |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| consumer’s requirements and risk profile. The sale of products and services should be based on what is best suited for the consumer, given their needs, financial capability, risk profile and specific circumstances. Registrants should ensure access to insurance products and services by vulnerable groups in the society, e.g. the elderly and persons with disabilities. Registrants may consider the development of a formal financial inclusion policy. | ensuring "access to insurance products and services by vulnerable groups in the society, e.g. the elderly and the person with disabilities."<br>(2) Brokers/Adjusters have no control/influence over the products and ergo the second half of this should apply to Insurers only. | consumer’s requirements and risk profile. The sale of products and services should be based on what is best suited for the consumer, given their needs, financial capability, risk profile and specific circumstances. Insurer Registrants should ensure access to insurance products and services by vulnerable groups in the society, e.g. the elderly and the person with disabilities. Registrants may consider the development of a formal financial inclusion policy. | Insurers/Brokers from ensuring access to insurance products and services by vulnerable groups. Regulation 14(1) (d) of the FOR allows simplified KYC measures in instances where the annual premium is $6,000 or a single premium of $15,000 or less. In line with the FATF Standards, the Central Bank’s AML/CFT Guidelines promotes a risk based approach to know your customer/ customer due diligence including simplified measures in lower risk instances.<br>It often comes to our attention that financial institutions insist on two forms of ID and address verification for on-boarding customers or for the renewal of policies; however, this is not a requirement of the law or the Central Bank guidelines under a risk based approach. Please revisit the Central Bank’s Guidelines for more information on this matter.<br>We have amended the section to state: Registrants should recommend and sell products and services that are suitable for the consumer’s requirements and risk profile. The sale of products and services should be based on what is best suited for the consumer, given their needs, financial capability, risk profile and specific circumstances. “Insurers should develop |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| products and services that are appropriate for economically vulnerable and lower income groups in the society, and should consider the development of a formal financial inclusion policy.” |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| 5.2.1 (a) | Know Your Consumer (a) An integral part of assessing the suitability of a product or service for a particular consumer is the assessment of “right fit”. Registrants should gather and record sufficient information from their consumers to assist with assessing their insurance needs before offering, recommending, arranging or providing a product or service. | Comment (A): (1) This wording is better suited to long Term Insurance which is not the main subject of this Market Conduct Guideline (Ref 2.1.2).<br>(2) In General Insurance the Proposal form/ quotation sheet usually provides more than enough information to "assess the suitability of a product" in so much as it proves ownership of the risk e.g. If you own a vehicle, you have need of Motor Insurance. "Formalizing" this quotation process further than the current industry norm (proposal form or Brokerage quotation sheet) is not recommended at this time as it will further reduce the meaningful advisory time that each registered intermediary has to spend with each client interaction (face to face quality time in which coverage questions can be asked and answered in an informal way to ensure understanding).<br>Comment (B): This appears to be more applicable to long term insurance than | (A)Know Your Consumer (a) An integral part of assessing the suitability of a product or service for a particular consumer is the assessment of “right fit”. Registrants should gather sufficient information from their consumers to assist with assessing their insurance needs before offering, recommending, arranging or providing a product or service. | Response to (A): Proposed amendment was accepted.<br>Response to (B): Ensuring product suitability applies to all classes of business. |
INDUSTRY REVIEW OF THE JULY 2022 DRAFT MARKET CONDUCT GUIDELINE FOR REGISTRANTS UNDER THE INSURANCE ACT, 2018
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| general insurance which usually covers specific asset or loss event. | ||||
| 5.2.1 (c) | The assessment of suitability of products and services should incorporate consumer details such as their: (i) needs , priorities and objectives as it relates to the duration for which the consumer wishes to hold the product; (ii) financial literacy; (iii) current and projected financial capacity; taking into consideration the consumer’s personal circumstances such as age, health, habits, debts, goals, dependents and future changes; and risk profile | Comment (A): (1) This wording is better suited to long Term/Pension Insurance which is not the main subject of this Market Conduct Guideline<br><br>(2) 'Financial Literacy' should be entirely removed...it implies that because someone is not financially savvy they should somehow not benefit from ("assessment of suitability of products") the best product for them (period). Someone's Financial Literacy should inform one's approach to explaining the Insurance product to them, but not alter the "assessment of suitability of products" process.<br><br>Comment (B): This does not appear to be applicable to general insurance or group business but appears to be more suited to individual life insurance, pensions and other annuity/investment type products. | (A)The assessment of suitability of products and services should incorporate consumer details such as their: (i) needs, priorities and objectives as it relates to the duration for which the consumer wishes to hold the product; (ii) current and projected financial capacity, taking into consideration (iii) the consumer's personal circumstances such as age, health, habits, debts, goals, dependents and future changes; and risk profile. | Response to (A): Agreed. Wording accepted with minor tweaks.<br><br>Response to (B): The organizational culture of fair treatment also applies to general insurance business. |
| 5.2.1 (e) | Registrants should develop/design products that could be directed to vulnerable persons or groups. Focus group meetings for the different categories of vulnerable consumers in the profile (e.g. the elderly, lower income | This is not communist/socialistic. We work in a free-market society, and "vulnerable persons or groups" are oft at high risk for failing to pay premiums (premiums which incidentally Brokerages are then responsible | Insurer Registrants in the event that they opt to develop/design products that could be directed to vulnerable persons or groups. Focus group meetings for the different categories of vulnerable consumers in the | Amended. The word “Registrants” has been replaced with “Insurers”. The intention of this requirement is that all persons should have access to insurance, even the most vulnerable. Consequently, insurers ought to |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| earners, persons with disabilities etc.) should be held to determine whether the target group understands the products that are being marketed to them. | for under this Act). If what you want to say is if a product is being targeted to a vulnerable sub-sector, ensure that the vulnerable group understands the products that are being marked to them, then say so...this does NOT say that. It implies we all have to start to go out and develop products for the aged/infirm. | profile (e.g. the elderly, lower income earners, persons with disabilities etc.) should be held to determine whether the target group understands the products that are being marketed to them. | consider all segments of the market when designing / developing insurance products for financial inclusion purposes. | |
| 5.2.2. (b) | The rationale given to a consumer for the recommendation to purchase a particular product should be documented and the consumer should attest to understanding his or her rights and obligations in relation to the service or product. In cases where the consumer opts not to take the recommended advice, an appropriately worded disclaimer should be signed by the consumer. | (1) The rationale is self-evident vis a vis type of product ie. you can’t sell HOC cover to someone who only owns a car. As it relates to Broker Intermediaries perhaps the CBTT rather means ‘purchase from a particular insurer’? Even still, at times Brokers will leave the choice up to their clients - e.g. if two or three premium/terms are awfully close and no specific recommendation will be made (the Broker advises ‘all are strong’) <br><br>(2) ‘and the consumer should attest to understanding his or her rights and obligations in relation to the service or product.’ This section is pointless. The consumer attesting to understanding, is no guarantee that the consumer understands. It’s like asking someone who is purchasing an avocado to attest that the avocado is a fruit. Whether it is a fruit is immaterial to the person who has already purchased it, what is material is if the fruit is edible. IF this type of pointless legalese MUST be included, it should just be included in all of the Proposal | (Leave full section out) | This section has been removed. |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| forms (which are under the instruction/approval of the CBTT) and should not be subject of the "Market Conduct Guidelines" for all intermediaries.<br><br>(3) "In cases where the consumer opts not to take the recommended advice, an appropriately worded disclaimer should be signed by the consumer." This would be woefully cumbersome to insist on. We might recommend a motor Policy with Company A because its $250.00 cheaper, but the client says "you know my mum is insured with Company B, let’s go with them". In such an instance, a 'disclaimer' would not be appropriate. A disclaimer would be appropriate if the client opts for an insurer that the Broker does not recommend at all or alternatively, choses an aspect of cover that the Broker advises against (such as an exceptionally high deductible). Brokers will automatically request disclaimers in this instance as a matter of protecting their Professional Indemnity Insurance. Our opinion is that there is no need for CBTT to regulate this aspect of conduct. | ||||
| 5.2.2 (D) New 5.2.2 (c) | A summary of the key facts related to the advice communicated verbally to a consumer should be retained by the registrant in print, electronic or other format that would facilitate easy retrieval. | The 'mischief' being prevented in this section is not completely clear & what you don’t want to encourage with this section is those dreadful (pages long) disclaimers that British Brokers/Insurers have to send each | Any written advise communicated to a consumer should be retained by the registrant in print, electronic or other format that would facilitate easy retrieval. | Amended to state: “Any advice given to a customer should be in writing. Where the advice is communicated verbally initially, it should be followed up with written communication to the consumer, and |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| consumer (that they never bother to read and never understand). | recorded and retained in the customer’s files.” | |||
| 5.2.2 (E) | Senior Management should institute appropriate checks and balances and should ensure that periodic reviews (e.g. at least every 3 years) of consumer files are conducted by Internal Audit for example, to confirm that the advice given meets requirements. | Comment (A): The structure suggested is rigid and impractical for small and medium Brokerage Houses where the day to day activity of the firm is NOT removed from the "Senior Management" (ergo a thrice yearly Audit is redundant).<br><br>Comment (B): Section 5.2.2 does not seem practical for general insurance or for group/term business.<br><br>For general insurance, the product sold is directly tied to the asset or loss/event to be covered. There are no real/major pre, during and post-sale discussions per se beyond the policy coverage and terms and conditions of the policy contract, which uses standard wording and features. | (A)For Registrants with over 25 registered intermediaries - Senior Management should institute appropriate checks and balances and should ensure that periodic reviews (e.g. at least every 3 years) of consumer files are conducted by Internal Audit for example, to confirm that the advice given meets requirements. | The requirement is applicable to all insurers. No change. |
| 5.2.2 (F) New 5.2.2 (e) | The findings of the periodic reviews as well as recommendations to resolve issues observed, should be reported to the Board by Senior Management. | IF Internal Audit is being tasked in 5.2.2(c) with conducting the periodic review of policy files to ensure that advice given meets requirements, shouldn't the findings be reported to the Audit Committee as per the usual internal audit reporting structure? | Section amended to state: "The findings of the periodic reviews and recommendations to resolve issues, should be reported by Senior Management to the Audit Committee or Board as appropriate." | |
| Responsible Business Conduct | ||||
| 5.3 | Registrants must act with integrity and avoid situations that present actual or potential | Seems to be duplicating the role of the Association's Code of Conduct/Practice. | Registrants must act with integrity and avoid situations that present actual or potential | No change. The regulator's guidelines allow for all registrants to have a common standard |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| conflict of interest. Registrants must implement policies, procedures and systems for responsible business conduct to facilitate the fair treatment of consumers. | conflict of interest. If not already a member of, and ergo governed by, the code of Ethics of their Professional Association (ATTIC, IBATT and the Association of Adjusters), Registrants must implement policies, procedures and systems for responsible business conduct to facilitate the fair treatment of consumers. | of operation. The Guideline is reaffirming this requirement. To the extent that members’ Code already has this requirement with which registrants’ comply, nothing additional needs to be done. | ||
| 5.3.1 (a) | Integrity in Business Conduct (a) Appropriate attention should be paid to the recruitment of staff to maintain high standards of ethics and integrity and to deliver appropriate outcomes in terms of fair treatment of customers. | This should be a standard part of recruitment given the nature of the industry (financial services). | The Guideline is reaffirming this. No change | |
| 5.3.1 (b) | Registrants should implement systems and controls to improve safety and security of payment transactions that will deter the misappropriation of funds. For example, funds’ access policies, introduction of electronic payment options, on-line banking, certified cheques and standing orders. | This should be a standard part of recruitment given the nature of the industry (financial services). | The Guideline is reaffirming this. No change. | |
| 5.3.1 (c) | All reimbursements, whether for over-payment or for a denied facility, must be documented along with the rationale for the reimbursements. Consumers should be requested to acknowledge receipt of all payments in accordance with the registrant’s procedures and records of the transaction shall be retained by the registrant. | Comment (A): Is deposit of the cheque/payment sufficient evidence of receipt (ie the returned endorsed check)? "Required to acknowledge" implies an active acknowledgement process that consumers will likely get exasperated by, and not want to engage in. Certainly, asking consumers for a receipt for every claim reimbursement will be tedious and seems unnecessary. | (A)All reimbursements, whether for over-payment or for a denied facility, must be documented along with the rationale for the reimbursements. | Response to (A): Noted. However, this section addresses the receipt of payments by the consumer from the registrant and requires consumers to acknowledge receipt of the said payment.<br><br>Amended to: Reimbursements, for example, over-payment or for a denied facility, must |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| Comment (B): This should be a standard part of collection and deposit controls/procedures. | be documented along with the rationale for the reimbursements.<br><br>Response to (B): See amended 5.3.1 (c) above. | |||
| 5.3.1 (e) | Registrants should have a board approved Conflict of Interest policy, to guide their behaviour. This policy should include guidance on the acceptance of gifts, including thresholds for their acceptance based on frequency and dollar value. Senior Management should monitor compliance with these thresholds and consequences should be established for breaches of the policy. Disclosure to Senior Management should be required for gifts received beyond the stated internal threshold(s). | Do agencies need to have their own COI Policy or can they just be required to adhere to the insurer's COI Policy? | Agencies and sales representatives may adhere to the COI policies of their insurer. However, the insurers’ COI policy should also treat with potential conflicts of interest by agents and sales representatives | |
| 5.3.1 (g) New 5.3.1 (f) | Insurers should have mechanisms in place which would permit consumers to lodge complaints against intermediaries that act on the insurer’s behalf, and which facilitate the insurer’s monitoring of and the resolution of complaints in a timely fashion. [See section 5.7 for details.] | Amendment. Rephrased to consider conduct issues as opposed to complaints.<br><br>Amended to state: “Insurers should implement effective systems to monitor the conduct of their intermediaries and ensure that persons acting on their behalf comply with the insurer’s policies and procedures and the provisions of the IA and regulations, including resolving issues in a timely manner.” |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| 5.3.1 (h) New 5.3.1 (g) | Registrants should identify, measure and assess all possible threats to responsible business conduct and fair treatment within the business environment and the organization and seek to mitigate its impact within the organization. | It would be helpful if the CBTT could develop a measurement template for the industry to use. | Since this is a self-assessment to be done by the registrant, the Central Bank does not want to be overly prescriptive, at this time.<br><br>Amended to state: Registrants should identify, record and assess all “material” threats to responsible business conduct and fair treatment within the business environment and the organization and seek to mitigate its impact within the organization. | |
| Brokerages, Brokers and Conflicts of Interest | ||||
| 5.3.2. (a) | Brokerages and brokers, where applicable, must not enter into any transaction which may conflict with the duty of care owed to the consumer unless such conflict is disclosed to the client and there is confirmation that the consumer consents to the transaction. | (1) We perceive a potential conflict with this wording arising with the "data protection act" (DPA). How can we disclose a conflict if we are not allowed to share a client’s information? Eg. Client A is a contractor; Client B of same Brokerage is an Architect. The Broker is Broker to both A and B. Client A requires client B to have Professional Indemnity Insurance in place, and the Broker wrote a certification letter on behalf of client (B) that the Insurances had been purchased by client (B) and were in place. Client (B) subsequently cancels his policy/is canceled for non-payment. The Broker is in the situation where due to the DPA/Client confidentiality they cannot reveal the cancelation to client (A), but client (A) might | (1) Disagree. The requirement in section 5.2.3(a) aligns with law. In particular:<br><br>(a) There is no conflict between the provisions of section 5.2.3(a) and the DPA. Section 6(c) of the DPA allows the disclosure of a client’s personal information by the brokerage, once the client is informed of the disclosure and consents to it.<br><br>(b) This is consistent with the position in sections 259(1)(b) and (2) of the Insurance Act, 2018 which permits a registrant (including a brokerage) to disclose information relating to the business or other affairs of a policyholder, consumer or other person, once the policyholder, consumer or other person gives expressed consent. |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| well be able to argue that they were owed a duty of care by the Broker.<br><br>(2) There is no need for a separate Conflict of Interest Policy if the Broker Intermediary is a member an Association in so much as the Association’s Code of Practice already extends/addresses Conflicts of Interests. | As such, any potential conflict of interest should be disclosed prior to execution of the transaction.<br><br>(2) The regulator’s guidelines allow for all registrants to have a common standard of operation. The Guideline is reaffirming this requirement. To the extent that members’ Code already has this requirement with which registrants’ comply, nothing additional needs to be done. | |||
| 5.3.2 (b) | The policy on conflict of interest should be appropriate to the nature, scale and complexity of the regulated activities. The conflicts of interest policy should: (i) identify the circumstances which constitute or may give rise to a conflict of interest or which may create a risk of damage to the interests of the brokerage’s consumers and itself; and (ii) specify the procedures to be followed, and measures to be adopted, in order to mitigate and manage such conflicts. | There is no need for a separate Conflict of Interest Policy if the Broker Intermediary is a member an Association in so much as the Association’s Code of Practice already extends/addresses Conflicts of Interests. This is unnecessary duplication. | If not already a member of, and ergo governed by, the code of Ethics of their Professional Association (ATTIC, IBATT and the Association of Adjusters) which already have a conflict of interest policy, the policy on conflict of interest should be appropriate to the nature, scale and complexity of the regulated activities. The conflicts of interest policy should: (i) identify the circumstances which constitute or may give rise to a conflict of interest or which may create a risk of damage to the interests of the brokerage’s consumers and itself; and (ii) specify the procedures to be followed, and measures to be adopted, in order to mitigate and manage such conflicts. | The regulator’s guidelines allow for all registrants to have a common standard of operation. The Guideline is reaffirming this requirement. To the extent that members’ Code already has this requirement with which registrants’ comply, nothing additional needs to be done.<br><br>Members of an Association would need to do a gap analysis against the CBTT guideline to ensure that their COI adheres to regulatory expectations. If the professional COI is more robust than the Guidelines - there will be no need to do anything further. However, if less robust, it will need to be updated in line with the Guideline. |
| 5.3.2.(D) | Brokerages and brokers should take reasonable steps to ensure that neither they nor any of their officers or employees offer, | It is usually understood that small corporate tokens of insignificant financial value (e.g. a customer appreciation cake from an insurer | Insurer’s and brokerages are to be guided by their own internal policies regarding the acceptance of any gifts or rewards. The issue |
INDUSTRY REVIEW OF THE JULY 2022 DRAFT MARKET CONDUCT GUIDELINE FOR REGISTRANTS UNDER THE INSURANCE ACT, 2018
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| give, solicit or accept any gifts or rewards, whether monetary or otherwise, that are likely to conflict with any duties of the recipient. | or attending an insurers Christmas party) tend to be excluded from COI policies, yet this guideline does not allow for same. It should be made entirely clear (whichever is the approach – it is OK or not at all). | is whether the substance and/or materiality can cause a conflict of interest. In general, COI policies tend to include thresholds for gift acceptance and/or declarations. No change. | ||
| 5.3.3.(b) | Intermediaries must document and implement systems and controls that ensure consumers are fairly treated. For example, to demonstrate fair treatment, complaints should be logged; roles and responsibilities should be clearly identified; and trends analyzed and discussed with insurers. | See comments in 5.1.1(B) | Insurer Intermediaries must document and implement systems and controls that ensure consumers are fairly treated. For example, to demonstrate fair treatment, complaints should be logged; roles and responsibilities should be clearly identified; and trends analyzed and discussed with insurers. | Each entity that interfaces with the consumer is responsible and accountable for their own behaviour/conduct with the consumer. No change. |
Due Care, Skill and Diligence
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| 5.4.1. (a) | Duty to Consumers<br>(a) Registrants must:<br>(i) behave responsibly, comply with applicable laws and standards and conduct its business competently and fairly.<br>(ii) be fit and proper and have the necessary skills, knowledge and ability to conduct the business.<br>(iii) provide consumers with products and services which perform in accordance with the terms and conditions of the policy and as advertised.<br>(iv) take all reasonable actions to prevent the consumer from being overly indebted or financially burdened.<br>(v) be able to demonstrate to the Central Bank | Comment (A): 5.4.1. (a)(iv) - We wish to request further clarification or examples of the types of actions a Registrant is expected to take to prevent the consumer from being "overly indebted" or "financially burdened"<br><br>Comment (B): (iv) and (v) do not appear to be applicable to/practical for general insurance. | Response to Comment (A): Noted. Implementation of a robust Know Your Customer framework as per Schedule 11 of the Insurance Act 2018 and as per 5.2.1 of this Guideline.<br><br>5.4.1 (a) (iv) has been reworded to "take all reasonable actions or measures to ensure that the product or service is suitable to the consumer's needs and financial position."<br><br>Response to Comment (B): Disagree. Please note that 5.4.1 (a) (iv) has been amended as shown above. The duty of care to all consumers as outlined in Section 5.4.1 |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| that consumers have received the requisite information to understand the product and their obligations as a consumer, before and at the point of sale. | (a) (iv) and (v) applies to all classes of insurance business and forms part of the registrant's requirement to know their consumers. | |||
| 5.4.1. (b) | Registrants should ensure that all persons employed to solicit and negotiate insurance business are fit and proper persons and registered with the Central Bank | Since the definition of "Registrant" includes an insurer, does this obligation then require insurers to have their underwriting/frontline staff comply with this, in particular part (b) | Yes, the Central Bank expects that good market conduct practices should commence from inception of product design to policy servicing. This includes the front line staff and underwriters who may be soliciting and negotiating insurance business. |
Policy Servicing
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| 5.4.2.(a) | Policies shall be submitted to policy holders within twenty (20) business days of completing the contract. | Some Insurers don't currently issue a Policy for any contract shorter than 12 months in duration. What is being done in that instance? Brokers receive policy documents from insurers and cannot control the time frame for policy delivery to policyholders. Upon receipt of policy a Broker should deliver to the insured within 20 days. | This is a legislative requirement. Refer to Sections 268(1) and (2) of the Insurance Act, 2018 which requires insurers, upon acceptance of risk, to issue a policy within 20 business days. | |
| 5.4.2.(b) | Registrants, where applicable, should have clear, detailed service standard timelines to deliver information, complete contracts, pay/collect premiums, process claims, and handle complaints. Service standards should also be implemented for intermediaries and insurance consultants. Information on the registrant’s service standards ought to be readily available to consumers in an easily understandable format. | Would be preferable for institutions/associations to have a "service standard expectation" that is applicable to all members that have each Brokerage have to develop a separate standard. | Institutions/associations can develop a service standard policy as necessary. However, each brokerage must incorporate this policy into their own internal processes. This has been included in the Guideline. |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| 5.4.2.(h) | Registrants, where applicable, should conduct spontaneous internal audits to ensure that employees are adhering to internal policy requirements. | (1) The "spontaneous internal audits" structure suggested is rigid and impractical for small and medium Brokerage Houses where the day to day activity of the firm is NOT removed from the "Senior Management". | Registrants with over 25 registered intermediaries, where applicable, should conduct spontaneous internal audits to ensure that employees are adhering to internal policy requirements. | By its very nature the word “spontaneous” does not connote “rigidity”. It is the Bank’s expectation that the registrant will determine the frequency of such internal audits. It is anticipated that each brokerage will document in its policies and procedures the rationale for when an internal audit will be required to be conducted.<br><br>In addition, this section was reworded to state: "Registrants, should conduct periodic internal audits or reviews..." |
| 5.4.2.(i) | Registrants should conduct reviews of consumer profiles and products, as they become due for renewal. Findings and recommendations derived from such assessments should be documented and maintained by the registrant. | (1) The formalized structure "Findings and recommendations derived from such assessments should be documented " suggested is rigid and impractical for the pace at which these reviews have to take place. The reality is the review (often verbal with the client or insurer as the renewal terms are being reviewed in preparation for the Brokers renewal notice being prepared) is reflected in the renewal notice itself (sometimes alternative quote being suggested/advisory on a change in policy/ advisory on a change in ownership of the insurer). We are not objecting, just the requirement for formalized "documentation". The reality is that any Broker who does not conduct this review, increases the likelihood of a Professional Indemnity claim being lodged against | Registrants should conduct reviews of consumer profiles and products, as they become due for renewal. | Disagree. Registrants have the duty to keep evidence of the review of consumer profiles and products so that the Central Bank can be able to verify these records during its on-site examination. Furthermore, it is expected that during the review of a consumer profile, updated information and its supports are collected. During a product review, the consumer is made aware of any key changes in the product and that these changes are documented.<br><br>This section has been reworded to state: Registrants should conduct reviews of consumer profiles and products, as they become due for renewal. "Any material issues identified should be documented along with the proposed remedial action." |
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| him/her, so this already automatically part of our process. | ||||
Post Sale Communication
| SECTION | EXCERPT | INDUSTRY COMMENTS | INDUSTRY'S SUGGESTED AMENDED WORDING | CENTRAL BANK OF TRINIDAD AND TOBAGO'S RESPONSE |
|---|---|---|---|---|
| 5.4.3. (a) | Post-sale information updates should be provided to consumers at regular intervals to keep them informed of the performance of the product and any approved changes in the terms and conditions over the life of the product, such as, changes to rates offered or charges applied to a product. | Comment (A): This Market Conduct Guideline does not speak to Pensions (2.1.1.) but "performance does not speak to Pensions" really seems to suggest ONLY Long Term Insurance (?) rather than General Insurance.<br><br>Comment (B): This does not appear to be applicable to general insurance. | This Guideline, inclusive of Post Sales Communication is relevant for all classes of insurance business. Further, refer to Section 266 and Schedule 11, "E. Post Sales Communication" of the Insurance Act, 2018. | |
| 5.4.3. (c) | Insurers should have post sales documents that are clear, fair and not misleading. The information in these documents should be accurate, up to date and clearly written. The method of presentation of the information should not disguise, diminish or obscure important information. | Amendment. Section 5.4.3(c) has been deleted as this its contents can be found in the Post Sales Communication Guideline and Schedule 11, "E. Post Sales Communication" of the Insurance Act, 2018. | ||
| 5.4.3. (d) | Central Bank’s Post Sales Communication - Policy Discontinuance - Guideline addresses the expected business conduct during the replacement of an existing long-term insurance policy from another provider. | Amendment. Section 5.4.3(d) has been deleted. | ||
| 5.4.4 (a) | Employee Training (a) All persons providing advice and /or soliciting or negotiating insurance business must pass statutory registration examinations and undertake ongoing training throughout their | Kindly confirm whether the obligations listed in this part are all requirements for underwriting staff of insurers to comply with. | The current legislation requires any person conducting insurance business to be registered. |
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