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Changes to New York’s Market Conduct Profile for 2011 Reporting

On March 2, 2012, the New York Department of Financial Services posted changes for the Market Conduct Profile due later this year, to be completed with data from 2011 on its website. There were only two changes indicated from last year:

  1. Question 7 in the Compliance Section is added. These questions relate to the Company’s AML Program and the specific products that are covered under the AML Program.
  2. In question 12 of the Compliance Section (formerly question 11), the question concerning membership in IMSA has been replaced with question concerning the membership with The Compliance & Ethics Forum for Life Insurers (CEFLI) or other similar organizations.

It is the second one that I found particularly interesting. As we have discussed here previously, the change from IMSA to CEFLI was a very big change and one that eliminated the compliance assessment and certification requirement for membership. I was a qualified independent assessor under IMSA, so I have a bias, but I do not think that membership in an organization that hosts webinars and conferences on general compliance topics is the same as one that mandates an exhaustive in-house assessment process and then has an outside assessor review that work.

Membership in CEFLI is not the same as membership was in IMSA. That is not to say that CEFLI doesn’t provide important information or the opportunity for significant discussions on insurance compliance topics. However it does not reflect the significant commitment to a process of assessment and evaluation of a large number of company policies and procedures the way IMSA membership used to. I am sure that the New York Department of Financial Services knows that and they do indicate that other similar organizations can be included in the response. I am, therefore, hopeful that membership in all the other organizations that support life insurance companies in their compliance efforts (e.g., the Association of Insurance Compliance Professionals, the Insurance Advertising Compliance Association, and the Life and Health Compliance Association) are given similar weight to CEFLI membership.

What made IMSA different was the rigorous assessment process. Without that in CEFLI, there are a number of equivalent organizations to which companies may turn to obtain information and compliance support. In my opinion, all should “count” in their favor on the market conduct profile.