1. SEMINAR NAIC/ASSAL/SVS REGULATION & SUPERVISION OF MARKET CONDUCT © 2014 National Association of Insurance Commissioners Lessons Learned

2. CONSUMER PERSPECTIVE  Consumers do not understand insurance  Consumers shop on price  Expectations may not match reality  Effective communication is necessary 2

3. INDUSTRY PERSPECTIVE  Culture of compliance must start with company executives  Policies and procedures must be in place  Functional areas must have responsibility for compliance  Compliance is good for business  Inappropriate behavior of few can tarnish image of industry  Effective communication is necessary 3

4. REGULATORY PERSPECTIVE  Primary goal is consumer protection  Competitive markets are necessary  Consumer education is necessary but difficult  Regulation creates level playing field  There must be a balance between regulation of entry into the market and regulation after entry into the market  Market conduct issues can impact company solvency and vice-versa 4

5. REGULATORY PERSPECTIVE  Market regulation is dependent upon inconsistent data  Market conduct regulation tends to be reactive  Regulatory responses need to be appropriate to the situation  Regulatory responses must be both effective and efficient  Regulation must change as markets change  Effective communication is necessary 5

6. QUESTIONS/COMMENTS 6