On-Site Inspections & Senior Officer Approval Regime Kenneth Baker Deputy Managing Director, Regulation

KReview KReview represents a range of automated supervisory tools used by the Commission to undertake effective and detailed on-site inspections

KReview Improve resource efficiency and effectiveness Enable the Commission to deploy skilled resources more effectively (i.e. where risks are highest) without losing sight of the wider perspective

KReview Standardised inspection work process and result analysis Improved consistency between reviews, supervisory capability and training

KReview Extensive bank of review questions covering all the relevant elements of the area under assessment, KReview guides the Commission’s Regulator through his or her review program Matrix behind the questions can help ensure that each response leads to appropriate follow up questions so tailoring the review and making sure the reviewer, time is not wasted on unnecessary questions thereby significantly improving the speed and efficiency of inspections.

On-site Inspection Findings Insurance Division Fiduciary Division

Common Breaches – Insurance Division Books and Records Notifiable Changes Annual Statements Management Agreements Reporting Obligations AML Code of Practice

Insurance Division Books and Records: *A failure of Insurance Managers to maintain adequate books and records to enable the Division to determine the type and classes of insurance business carried o by the insurer and to enable the Division to conduct a proper examination of the insurer’s affairs and to ascertain with reasonable accuracy its financial position.

Insurance Division Notifiable Changes: *A failure of Insurance Managers to ensure that their clients submit requests for prior approval or provide notifications of changes as required by legislation.

Insurance Division Annual Statements: *Late submission by insurers of audited financial statements as required by the legislation. Insurers have historically been tardy in submitting annual licence fees.

Insurance Division Management Agreements: *A failure of Insurance Managers to ensure that management agreements include the insurers’ obligation under the Act relating to awareness of compliance requirements.

Insurance Division Reporting Obligations: *A failure of Insurance Managers to ensure that events are reported when the insurer is conducting its business in a manner contrary to the Act and is not complying with any provisions of the Insurance Act, 1994.

Insurance Division AML Code of Practice: Identification procedures (new & continuing business) Suspicious transaction procedures Staff education and training

Common Breaches – Fiduciary Division Off-Site Preliminary Assessment On-Site Assessment Anti-Money Laundering

Fiduciary Division Off-Site Preliminary Assessment: Events requiring prior approval Notifiable events Accounts Internal testing

Fiduciary Division On-Site Assessment: Capital adequacy Complaints Training Records

Fiduciary Division Anti-Money Laundering: Identification procedures – new & continuing Identification procedures – introduced Suspicious transactions procedures Registers Staff education & training Client file review

Senior Officer Approval Regime Definition Legislation Application of Regime Fit & Proper Test Notification & Subsequent Approval Withdrawal of Approval

Definition Senior Officer: -Means a person appointed to perform such supervisory or managerial functions with respect to a licensee as may be prescribed

Legislation Banks and Trust Companies Act, 1990 Company Management Act, 1990 Financial and Money Services Bill, 2007 Insurance Bill, 2007

Application of Regime Anyone likely to be able to exert significant influence over conduct of the licensee’s affairs in relation to regulated activity; Anyone dealing directly with licensee’s customers in relation to regulated activity; Anyone dealing with the property of the licensee’s customers in relation to regulated activity

Fit & Proper Test Integrity Financial stability Competence Track record

Post Approval Notification Resignation Termination Misconduct Defalcation

Subsequent Approval Change in job Change in designation with same licensee

Withdrawal of Approval Individual no longer considered “fit & proper” Individual failed to comply with relevant legislation and other requirements Individual pose risk to consumers & confidence in the financial system Previous disciplinary record and compliance history

Conclusion Questions & Discussions