The IOMFSA has issued the following guidance:
✅ Long Term Insurers sector specific guidance note;
✅ Long Term Insurers Supplemental Information Document; and
✅ Civil Penalties Regulations guidance note.
In this blog we acknowledge the Authorities ability to intervene with penalties where external criminal sanctions are not being considered.
The news that yet another Isle of Man regulated entity has been fined is very sobering.
It is an example where a Company may fundamentally believe they are operating in accordance with what is required yet fall short on inspection.
A Closer Look at the Isle of Man Financial Services Authority Inspection.
In October 2021 the Authority published its enhanced inspections guidance. In tandem with the development of their Supervisory Approach, the Authority has enhanced their inspection methodology which will be applied to all inspections undertaken.
The guidance provides an overview of how Firms are selected for an inspection and what they can expect during the different stages of the process.
The guidance is intended to promote transparency by providing Firms with typical timelines and an understanding of what happens during each phase of an inspection. It outlines expectations of the Firm and the Authority throughout the process.
It also sets out the requirement for Firms to produce a remediation plan (where appropriate) to explain how and when they will address any observations and conclusions arising from an inspection.
Let’s break this down some more.
The starting place for an Authorities AML/CFT inspection is to understand a Companies risk-based approach. This is the starting point for the identification of risk and how they are managed, mitigated or controlled.
The inspection will look at each of the risk documents and how they are applied in terms of actual business take on and ongoing monitoring.
How can Companies proactively and effectively assess that their frameworks are fit for purpose?
The answer is to ensure that risk frameworks are as robust as they possibly can be, monitored regularly for their effectiveness and maintained up to date.
It is essential to ensure that where the business model changes this is adequately considered and documented.
This is often tricky, particularly for smaller Companies who may not have adequate compliance or audit resource to call on.
We have worked with a number of Companies delivering high level appraisals of their risk assessment processes and procedures.
Whilst inevitably short comings are identified, it allows Companies to put in place a plan to remediate deficiencies, challenge areas not previously considered and strengthen the control environment.
In turn this allows for a considered project plan to be put in place with detailed action points and an agreed timeframe for completion.
Self-identification and remediation is a much better outcome than having an Authority inspection report full of deficiencies.
And this is where we can help.
Our complimentary compliance consultation is a great place to start. Your time is precious – we won’t waste a minute. Book your free consultation here today.
