Colin Manley, director of insurance, pensions and fiduciary services at the IoMFSA, confirmed to International Adviser that he had recently met with the IA to talk about how the two financial centres are going to implement new rules of indemnity commission.
“We actually visited the Insurance Authority a couple of weeks ago. We had a fruitful conversation. They were interested in what we were doing and we were interested in what they were doing,” he said.
Life sector reforms
The UAE watchdog, in a draft circular released on April 25, set out its planned overhaul of the life sector, including a ban on indemnity commissions, limits to fees and charges on industry products and tighter rules on financial advisers.
This second consultation into the proposals ended on 11 May, but the watchdog has yet to release the final regulations, which will come into force once they are published in the state’s official gazette.
Meanwhile, the Isle of Man published the final draft of its Conduct of Business Code last month, requiring life companies based on the Island to comply with broad commission disclosure by 1 January 2018 and policyholder specific commission levels a year later.
The consultation for the latest draft ends 16 June 2017.
Earlier this week, industry sources told International Adviser that the IoMFSA is likely to scrap broad commission disclosure requirements in favour of implementing policy-specific disclosures by January 2019.
Manley said he and the UAE regulator discussed their respective ‘code of business conduct’ regimes, adding that if the IoMFSA deams the UAE regaultion to be equivalent to its own it will provide specific exemptions to life companies based there.
“It’s an evolutionary process and that’s why it was important for us to have that conversation and explain where we are coming from,” said Manley.
Karen Badgerow, chief executive of IoMFSA, added that both jurisdictions are “committed to the programme of having more transparency for consumers”.
“It’s all a matter of timing, that’s where the matter hits the road in terms of competitive landscape,” she said.
Commission cap vs disclosures
Manley explained the the IA has proposed caps on indemnity commission due to a number of complaints the regulator has received, revealing that the Isle of Man would not consider a similar approach.
“It’s not for us to impose commission bans or caps in other jurisdictions. The UAE can take their approach within their own market.
“When we met the IA, their direction of travel is very different from ours, in that they’re going to cap commissions. Whereas, we’re seeking to have commission disclosure as a discipline rather than capping,” he said.
Manley also revealed that the IoMFSA is also in talks with other regulators in “significant markets” such as Hong Kong and Singapore.
“We’ve had lots of conversations with other regulators. We’ve had conversations with the UAE recently, we’re looking at Singapore frameworks, the Hong Kong frameworks.
“Where we have significant markets, we have had conversations with other regulators in terms of what their conduct of business requirements are and what they might look like in the future,” he said.