A General Insurer’s experience of an FSA Compliance Audit Insurance Institute of London 12th January 2004 Simon Jenvey Prudential Compliance Manager Zurich Financial Services - UK General Business

Content FSA Regulation - The Story So Far Visit Purpose Visit timetable Documentation Packs Insider information Hot topics Take away points

The FSA’s Objectives & the Principles of Good Regulation maintain confidence in the UK financial system secure the appropriate degree of protection for consumers promote public understanding of the financial system reduce the scope for financial crime Maintaining the UK’s international competitive position Most efficient and economic use of resources Competition Facilitating innovation Responsibility of firms’ own management Being proportionate

FSA regulation - the story so far The Interim Prudential Regime N2 31 Dec 2001 FSA ARROW Visit Oct 2002 The Integrated Prudential Regime FSA Risk Mitigation Plans General Insurance Conduct of Business Regulation Project Mainwaring Implementing the Integrated Prudential Regime

Visit Purpose ARROW Risk Mitigation Plan Thematic/Project Discovery/Familiarisation Consultative

Visit Timetable FSA Visit Request Senior Management Briefing Mock Interviews Mock Interview Feedback FSA arrive

Documentation Packs Organisation Charts Financial Reports Committee Details Material Intra-group transactions IT strategy Key Risk/Control Indicators Quarterly Financial Report Pack Product distribution details Market Share information Financial projections and capital planning Key financial indicators by business unit Product/geographical diversification Top 5 business unit risks Top 20 Customer relationships Non-life Reinsurance ceded Investments Outsourcing Delegated Authorities

Insider Information Know your supervisor The Risk Assessment Approach Updates from Compliance Lessons from consultants and peer groups Co-ordinate contact with the FSA

FSA Hot Topics Control/Risk Process - including escalation/timely resolution Governance structures/processes. Management information - recipients/actions Documentation - “if not, does not exist”

Take Away Points Understand the purpose of the visit Know your supervisor Documentation Packs Provide support for interviewees Anticipate themes See the visit as an opportunity

An Insurer’s experience of an FSA Compliance Audit Insurance Institute of London 12th January 2004 Simon Jenvey Prudential Compliance Manager Zurich Financial Services - UK General Business