Manx Insurers Falter Over Self-Regulation Plans

by Amanda Banks, Tax-News.com, London

22 March 2002

It was revealed recently that the Isle of Man life assurance sector has experienced problems in attempting to formulate coherent self-regulation plans.

According to a report in the FT Adviser last week, the regulator for the sector, the Insurance and Pensions Authority (IPA) had asked life companies based on the island to formulate a new code of conduct, in keeping with the current international climate on money laundering and transparency issues.

Although the sector is more than willing to co-operate with the IPA's request, it appears that a lack of consensus is behind the delays in forming an effective self-regulation strategy. FT Adviser reported that the Manx Insurance Association (MIA) had hoped to agree upon procedures for vetting IFAs and provide a draft statement at its February meeting, but was unable to reach an agreement. It has also been unable to decide upon how the insurance providers themselves should be regulated.

According to reports, the MIA is looking to develop a more stringent version of the Association of International Life Office's Statement of Best Practice. The AILO statement requires business introducers and fund managers and advisers to: provide fit and proper business, work against monitored strategies and objectives, provide transparent product information, establish efficient complaints procedures, and implement anti-money laundering and fraud strategies.

The MIA's difficulties in reaching a consensus on the issue of self-regulation stem from several different sources. Speaking to FT Adviser, Colin Campbell, the Head of Marketing for Canada Life International, explained: 'We need a balance to ensure investor protection without too much red tape. We do not want to become a business protection unit. We want to try and make it easy for people to invest and it is a fine line...getting that right.'

Dave Schuster, Deputy Chairman of the MIA, revealed that the need to ensure that any new regulations are in line with fast changing international standards may also have slowed the process.

'With the money laundering legislation, for example, there has to be a commonality in our approach and for an international stand on the issue,' he observed, adding that: 'This is the way things are going. The world is becoming a smaller place to do business in and we need common standards.'

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