1. Implementation of the Principles of Market Conduct Robert H Gaynor President WFII Nigel Masters Chair, Insurance Regulations IAA

2. Overview Setting the stage Robert Gaynor – the WFII view The case for self-regulation of Market Conduct Market Conduct – a personal view of the future Questions and comments Closing remarks

3. Setting the stage Market Conduct principles in Principle 11 and “Principles of Conduct of Business” from December 1999. Core Principles to be reviewed. Initial alert from feedback from FSAP in Bonn. Standards to follow at some point ? Good time to review the direction ahead.

4. Themes from FSAP reports “In relation to consumer protection, it is essential that all who are involved in selling insurance products comply with some kind of ethical code.” “The supervisory authority does not require company boards to establish written policies for fair treatment of policyholders.” “The Insurance Act, regulations, policies, guidelines or procedures contain no provision with regard to market conduct.” “There should be control over disclosure requirements, conflicts of interest, use of misleading information.”

5. Setting the stage What models of Market Conduct are available? –UK FSA Evolving over time - better behaviour but at what cost? –Indian product regulation Reflects current consumer awareness –US class actions –US IRMA reports

6. Setting the stage Impact of Market Conduct regulation: Too heavy ? Alienation between regulator and industry Costly for industry and consumer Consumer confidence undermined Too light ? Poor practice takes years to correct Consumer scandals with political fallout Consumer confidence undermined