Product Design and Pricing Criticized as Key Factors in Poor Customer Outcomes
A recent report has highlighted the critical role that product design and pricing play in determining customer outcomes, with complex products posing a higher risk of poor results. The study found that features such as early encashment and inadequate disclosure of risks can lead to detrimental outcomes for policyholders.
Non-Compliance Issues Addressed by Regulatory Bodies
Regulatory bodies have stepped in to address non-compliance issues, emphasizing fair treatment and protection for customers. Intermediaries are being urged to prioritize adequate training and oversight to prevent misaligned incentives and ensure fair customer treatment.
Claims Handling and Policy Definitions Crucial to Customer Satisfaction
Effective claims handling and policy definitions are essential components of Treating Customers Fairly (TCF), with prompt and accurate claims settlement being paramount for customer satisfaction. Companies are shifting their focus towards claims settlement rates as a positive indicator of product quality.
- Clear policy benefits explanation is crucial for customer understanding.
- Accurate disclosure by customers is essential to prevent declined claims.
- Technology integration, such as smart systems and wearable devices, is enhancing the claims process and pricing accuracy.
Regulatory Bodies Take Action
In related news, the Hong Kong Monetary Authority (HKMA) has taken disciplinary action against TNG (Asia) Limited for violating the Payment Systems and Stored Value Facilities Ordinance. The company was reprimanded and ordered to pay a penalty of HK$1,575,000 for failing to meet anti-money laundering measures and risk management guidelines.
- The Securities and Futures Commission (SFC) has also secured its first criminal conviction of securities fraud via illegal short selling.
- Ms Christine Yeung Tak Sum pleaded guilty to the charges brought by the SFC, marking a significant milestone in such cases.
BDO’s Expertise
At BDO, our financial services team is dedicated to helping companies stay compliant with regulatory requirements. Our experts can provide consultancy services on:
- Compliance with internal control procedures and regulations
- Independent assessment for license application
- Staff secondment
- Third-party assurance
Contact us to learn how we can help your company navigate the complex world of compliance.
Read more about our services: [insert link]
Stay up-to-date with the latest compliance news and updates from BDO’s financial services team: [insert link]