Conduct risk goes beyond what has been expected of firms in the past in relation to treating customer fairly. It focuses on the essence of a firm from product design to handling customer complaints, and it drives to the heart of the behaviours, culture, morals and ethics of people at all levels of the organisation. In recent years, conduct risk has become an area of significant regulatory focus, with an increasing onus on firms to define and manage conduct risk explicitly as part of their risk management framework.
The Insurance Authority has published GL21 which requires an authorised insurer (AI) to put in place a conduct risk policy as part of their Enterprise Risk Management framework to routinely identify, monitor, manage or mitigate conduct risk. The Guideline took effect on 1 January 2020, and AIs must comply with the new requirements.
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