In the review, the FIN-FSA found that, as a rule, most non-life insurance and life insurance companies have organised the compliance function in accordance with the provisions. However, the FIN-FSA urges companies to pay attention to the following issues, particularly found in the ongoing supervision:
- The compliance function should be sufficiently resourced for the proper performance of the function. Comprehensive access to information and inclusion must also be ensured.
- When applying the principle of proportionality, the company must document the rationale behind the way in which the compliance function is organised and review it periodically. As the company expands or becomes more complex, the compliance function must always be proportionally strengthened in both quantitative and qualitative terms.
- When a person carrying out compliance tasks also participates in the tasks of the business they supervise, the company should have adequate and clear internal processes and procedures in place to avoid potential conflicts of interest.
- For persons carrying out compliance tasks, the allocation of time between compliance tasks and other tasks should be expressly defined.
- When drawing up supervision plans, companies must pay particular attention to their realism and feasibility and take into account changes in the regulatory and operational environment.
- The compliance function should monitor and review, for example, the preparation of the company’s strategy and other significant projects already at the preparatory stage, before any decisions are made. The views of the compliance function and the rationale behind a decision deviating from them should always be clearly documented.
The FIN-FSA’s ongoing supervision will continue to monitor compliance practices as well as the influence and sufficient resourcing of the function. A strong, independent and sufficiently resourced compliance function is in the common interest of both the company and the supervisory authority. An appropriate compliance function serves to ensure and strengthen a responsible and reliable operating environment for companies’ management, employees and customers alike.
For further information, please contact
Teija Korpiaho, Head of Division, tel. +358 9 183 5528 or teija.korpiaho(at)fiva.fi.
Supervisory letter: The FIN-FSA’s observations on the organisation of the compliance function