Overview.
In an increasingly regulated UK insurance market, firms operating with large networks of appointed representatives (ARs) face growing scrutiny from the Financial Conduct Authority (FCA). A specialist professional services and technology firm sought to strengthen its oversight framework to ensure compliance across its diverse AR portfolio. We were engaged to design and implement a tailored monitoring program that would meet regulatory expectations while remaining proportionate to the risk profiles of each AR.
Client Situation.
The client, a division of a global insurance operations and services group, provides regulatory, operational and administrative support to ARs across the UK insurance market. With a large number of ARs under its umbrella — distributing a mix of commercial and consumer products — the firm required a scalable and proportionate oversight framework. Monthly conduct risk MI reports were already in place, offering valuable insights into AR performance and conduct risk levels. However, the client recognized the need for a formalized audit process to validate compliance practices and identify areas for improvement.
Objectives.
- Conduct annual audits of all ARs to align with RMAR reporting cycles.
- Use existing Conduct Risk MI and compliance documentation to inform the audit scope.
- Deliver actionable insights and remediation guidance to improve AR governance.
- Provide optional compliance advisory support to individual ARs requiring assistance post-audit.
Our Solution.
We proposed a structured audit program tailored to the client's operational model with audit reviews to understand individual risks and issues and a delivery plan to execute the work and deliver any changes required.
Audit Reviews.
- Frequency: One audit per AR, per annum.
- Scope: Based on the client's existing audit templates, compliance monitoring plan (CMP) checklist, conduct risk MI and prior audit reports.
- Methodology: Desktop reviews conducted remotely, supported by remote video interviews and documentation analysis.
- Tools used: CMP desktop review plan, AR summary risk assessment and compliance monitoring plan checklist.
Execution and Delivery.
All documentation was requested two weeks prior to each audit and individual reviews were conducted by a senior compliance consultant with oversight from one of our directors. Final reports, including findings and recommended remediation actions, were provided to the client's management for each AR.
Outcome.
The client now benefits from a consistent and transparent audit framework that:
- Enhances visibility of their AR compliance practices.
- Supports regulatory alignment for the client as principal, and the individual ARs, with FCA expectations.
- Enables targeted remediation and advisory support at individual AR level.
- Reduces conduct risk exposure for the principal and across its AR network.
Our approach has ensured that the client's oversight is proportionate to risk and scalable across a diverse and growing portfolio of ARs.
