CHAPTER 10 CONSUMER PROTECTION 9% OF THE EXAM

General Data Protection Regulations (GDPR) Does it protect… Public data  Corporate data  Personal data  All of the above  Information Commissioner ? Data Controller Data Subject Data Processor

General Data Protection Regulations (GDPR) processed lawfully, fairly and in a transparent manner collected for specified, explicit and legitimate purpose adequate, relevant and limited to what is necessary accurate and, where necessary, kept up to date kept for no longer than is necessary processed in a manner that ensures appropriate security

General Data Protection Regulations (GDPR) Data subjects rights: The right to be informed. The right of access. The right to rectification. The right to erasure. The right to restrict processing. The right to data portability. The right to object. Rights in relation to automated decision making and profiling.

Data Protection Bill (DP Bill) Under GDPR different member states are allowed to make limited provisions on how GDPR is applied in their country. The UK has passed the Data Protection Bill to modernise the data protection rules in the UK and will need to be looked at in conjunction with the GDPR. Provide clarity on definitions used in GDPR in a UK context. Set the parental consent age to children under 13. Allow the information commissioner to levy fines up to a maximum of £17m - €20m – 4% global turnover (whichever is greatest)

ETHICAL STANDARDS AND CODES OF CONDUCT Ethics relate to morality Morality therefore relates to an individuals attitudes and behaviours CII Code of Ethics: This code should not be seen as yet another regulatory burden but rather as a virtuous platform for improving the reputation of CII members as a whole and in distinguishing our membership in comparison with less qualified and regulated competitors. Beyond this, adoption of and adherence to the code can help promote standards and public trust.

ETHICAL STANDARDS AND CODES OF CONDUCT Ethical behaviours… INTEGRITY FAIRNESS SERVICE CLIENTS INTEREST COMPLIANCE

ETHICAL STANDARDS AND CODES OF CONDUCT 5 central principles in the cii code of ethics: Comply with the code and all relevant laws and regulations Act with the highest ethical standards and integrity Act in the best interests of each client Provide a high standard of service Treat people fairly, regardless of, race or racial group, sex or sexual orientation, religion or belief, age and disability, marriage and civil partnership, pregnancy and maternity and gender reassignment.

ETHICAL STANDARDS AND CODES OF CONDUCT Compliance with the code, relevant laws and regulation: Must act in an open, co-operative and courteous manner. Members must abide by the spirit and letter of the law. Example: You are an intermediary. Your internal compliance procedures state that the renewal process for a client should begin one month prior to renewal. You are aware that a particular client will be on holiday for a significant part of the period immediately prior to renewal and that there is likely to be a need to consider other insurers terms because of the poor claims experience during the current policy period.

ETHICAL STANDARDS AND CODES OF CONDUCT Highest ethical standards and integrity Honesty, trustworthiness and reliability. Avoid taking unfair advantage of clients, colleagues or third parties. Example: You work for an insurance company. You have an expense account that permits you to entertain intermediaries that are likely to generate new business flows. There is a stated limit for any one meal / event. A particular intermediary shows encouraging signs of being willing to consider placing business with you having not been a supporter of yours in the past.

ETHICAL STANDARDS AND CODES OF CONDUCT The best interest of each client Honesty, truthfulness and objectivity. Example: You are an intermediary that has arranged separate private motor insurances for two different clients. As part of your service you have agreed to attempt to recover for each client their uninsured losses (costs of car hire, out of pocket expenses etc.) following a non-fault motor accident. There is a car collision involving both your clients and each maintain that it is the fault of the other.

ETHICAL STANDARDS AND CODES OF CONDUCT High standard of service Transparency and suitability Example: You work for an insurance company. An analysis of recent complaints from customers shows that the team for which you are responsible are receiving an increasing number of complaints from customer relating to claims that the customers expected to be covered under their policies, but were excluded. The timing coincides with the introduction of a rewritten series of scripted answers for the provision of information about cover (provided at point of sale). Its introduction reduced the average time for each sale significantly.

ETHICAL STANDARDS AND CODES OF CONDUCT Treating people fairly (non-discrimination) Avoidance of unfair discrimination on grounds of race, gender, sexual orientation, religion, age or disability. Example: You work for an insurance company that has a practice of offering travel insurance for those up to 70 years of age. You have been challenged about this practice by someone who is 74 years of age arguing that they are fitter than most 65 years old.

TRAINING AND COMPETENCE A firm must ensure that they: Employ personnel with the skill, knowledge and expertise necessary for the responsibilities allocated to them. Take into account the nature, scale and complexity of its business.

TRAINING AND COMPETENCE The FCA expects that: A firms employees are competent Employees remain competent Employees are appropriately supervised Employees’ competence is regularly reviewed The level of competence is appropriate for their role Competence relates to: Technical knowledge Skills and expertise Market/product changes

TRAINING AND COMPETENCE TRAINING RECORDS NON-MIFID General Insurance Companies 3 Years MIFID Investment firms 5 Years

COMPLAINTS PROCEDURES Definition of a complaint: Any oral or written expression of dissatisfaction, whether justified or not, from a person about the failure of a financial service. FCA Categories of complainants Eligible Non-eligible

COMPLAINTS PROCEDURES Definition of an eligible complainant: Consumer A micro-enterprise which employs fewer than 10 persons and has a turnover of annual balance sheet that does not exceed 2 million euro A charity with an annual income of less than £1 million A trust with a net asset value of less than £1 million

COMPLAINTS PROCESSING Complaints records must be kept for at least 3 years. The files must contain the following: The name of the person dealing with the complaint. The name of the complainant. The capacity (eligible or non-eligible) The substance of the claim Corresponding file notes Any redress offered

FINANCIAL OMBUDSMAN SERVICE Membership is compulsory for insurers and authorised firms Independent organisation that handle disputes between company and customer Eligible complainants have 6 months to go to the FOS once the complaint is closed The ombudsman's decision is binding on the insurer, but not the complainant Maximum award is £150,000 Funded by levy’s on all authorised firms

FINANCIAL SERVICES COMPENSATION SCHEME COMPULSORY INSURANCES The FSCS is a one stop compensation shop that provides compensation to customers of authorised insurers and intermediaries. Covers claims against firms that are unable, or likely to be unable to pay claims against them. Funded by levy’s on all firms that use them. COMPULSORY INSURANCES ALL OTHER INSURANCES 100% COMPENSATION 90% COMPENSATION