The FSC introduced the guidelines on enhancement of internal control measures related to credit and deposit activities of banks concurrently operating insurance brokerage and agency businesses
1.The banks shall implement “Know Your Customer” process to make sure that they understand the risk bearing capability of their customers and enhance the “Know Your Product” process for providing appropriate products to their customers based on the assessment of product features.
2.The commission plan shall align with the “Principle of balanced remuneration structures” of the Treating Customers Fairly Principles. If the financial advisors do not abide by the Treating Customers Fairly Principles, the banks shall recover the bonuses that have been granted to them and introduce appropriate punishment policy.
3.The guidelines for enhancement of internal control measures for the aforementioned two types of insurance products purchased by customers who pay the premiums with loan extended by the credit department of banks:
(1)Control measures before loan extension: the banks shall confirm whether their customers purchase the aforementioned two types of insurance products based on their own will. In addition, the banks are required to obtain customers’ declaration for such consent and preserve related referral records.
(2)Management practices after loan extension: the banks shall establish a system audit mechanism, which shall use the client’s ID to check the information regarding a customer’s loan(s) extended by the banks’ credit department and insurance policies he/she has purchased from the bank’s insurance brokerage or insurance agency department. The banks shall introduce a punishment scheme for the staffs who do not correctly record the information of loan purpose and income of their customers.
4.The bank shall review the appropriateness of its branch’s authority to waive the penalty of interest forfeiture for early-termination of time deposits denominated in NTD and foreign currencies and impose proper restrictions to such authority.
5.The banks shall not use their customer’s deposit information to solicit businesses in a misleading or inappropriate way. The defects in different categories discovered by examination of the FSC shall be incorporated into the key issues of the bank’s self-checking and general audit activities of its internal audit operation.
The banks shall introduce all of the enhancement measures in the guidelines by the end of January 2020, except the aforementioned system audit mechanism, which shall be established by the end of June 2020.
Visitor： 143 Update： 2019-12-12