Final guidance for intermediated distribution under CoFI regime released
Final guidance for intermediated distribution under CoFI regime released | Insurance Business New Zealand
Insurance News
Final guidance for intermediated distribution under CoFI regime released
“Responses to the consultation were constructive”
Insurance News
By
Kenneth Araullo
The Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko has announced the publication of its final guidance for financial institutions regarding intermediated distribution of financial products under the Conduct of Financial Institutions (CoFI) regime.
Programs conducted under this new regime must account for intermediate distributions arrangements where an intermediary or agent is involved in the distribution of a financial institution’s products or services, such as insurance or mortgages. The draft guidance was informed through a series of workshops held with institutions and intermediaries in 2022, with finalisation occurring during consultation earlier this year. In total, the FMA received 15 submissions from a range of stakeholders during the consultation period.
According to a news release, this final guidance outlines the regulator’s expectations for intermediated distribution under the new regime at a high level, meaning it can be applied across different sectors and models. The FMA also reminded institutions that it does not prescribe what they must do for compliance, as there is no “one-size-fits-all” approach for the whole sector.
“Responses to the consultation were constructive,” FMA executive director for regulatory delivery Clare Bolingford said. “We expect the guidance to be well-received because it is principles-based, at a high-level and provides practical examples of how to maintain a fair conduct programme when managing customer relationships through an intermediary. This is consistent with our outcomes-focused approach to regulation, the new conduct regime, and our intention to empower financial institutions to take ownership of how they drive fair treatment of consumers in their businesses.”
Bolingford said that this includes the risk management involved in treating consumers fairly, and that the FMA wishes for firms to have the flexibility in designing and implementing their own fair conduct programs in line with their business and distribution models.
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