A new survey from EY on chief compliance officers (CCO) focuses on the growing issues compliance teams face as the needs of insurance carriers evolve.
The survey interviewed CCOs from 20 insurance providers across the globe, and inquired about specific trends that have changed the CCO role. Seven topics were chosen as a baseline for the survey. They include: Role and stature of the compliance function, compliance management, compliance MI and reporting, regulatory interaction, consumer protection, technology use, and future outlook.
The survey found that while compliance is a major part of insurance providers' current and future control networks, it is often seen as a "second line" control function. Yet, 75 percent of CCOs surveyed say that first line managers had compliance-related annual objectives.
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As far as regulatory interaction goes, the findings varied among those surveyed. While the majority (58 percent) say they interact with regulators monthly or even daily, 10 percent say they communicate on an ad hoc basis. Sixty-five percent say regulatory visits happen annually, and others reported that the visits were sporadic and irregular, sometimes even years apart.
One of the surveys most important topics – consumer protection – shows that 72 percent of CCOs surveyed feel its impact has affected their business, while 76 percent say they now report on consumer protection risk. The survey suggests this increased concern could be because new regulations have been implemented, or older ones have been introduced with stricter guidelines.
As for the future of CCOs and compliance teams, 86 percent say the compliance function has increased in size over the last year, and contingent on other factors, that growth is expected to continue. Those surveyed also believe senior management teams have the expectation for this growth, despite the survey noting several challenges to come.
Elements such as compliance officer liabilities, adapting local thought to meet emerging issues, construction of global compliance systems, and doing all of this on a budget are just a few of the hurdles CCOs have to jump in order to succeed in the future.
The survey also pointed out two words used regularly in the CCO interviews to define the compliance role within the insurance sector: relentless and demanding. "This is particularly due to continually evolving regulatory requirements and new emphasis being place on issues such as customer protection and organizational culture," the report says.
These two areas of value won't dissipate anytime soon, the report suggests, saying CCOs that gain clarity on these challenges will maximize the compliance function.
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