Looking at Five Compliances In 2012
2012 is expected to come with some political and economic instability. The state and federal governments have reviewed their requirements for compliance with regulations that are aimed at mitigating risk. There are bound to be challenges for issuers with regard to compliance with new laws and regulations.
Insurers were expected to be mindful of probable issues related to compliance as 2011 came to an end. As companies headed for modernization regarding insurance in 2011, expectations have gone high. The five main categories of issues that were anticipated to come by were issues related to:
- Social Media: The main challenge for 2012 is to know at what point compliance with regulations falls weak. Nearly every business industry and insurance industry uses social media as a best practice for marketing. Through social media networking, a lot has been accomplished, however disregard for certain regulations has also become a challenge. To assist insurers to tackle this problem, the NAIC (National Association of Insurance Commissioners) and the Financial Industry Regulatory Authority (FINRA) issued a list of guidelines. Their approach is to ensure compliance with two categories in social media. These are Interactive Content and Static Contend. This is aimed at emphasize that all content subject to documentation in accordance with regulatory guidelines. Imposition of compliance with this means, that the insurer will be responsible and face consequences, if static content is used without consent from website owners. Moreover, the content must be in compliance with regulations governing advertising. When interactive content will be used, insurers will not be responsible. Comments, posts and links shared during interaction on social media can be shared without consequences. Although, there will be some instances where certain content may be sensitive and the insurer may have to take responsibility.
- Data Security (Risk and Breach): Protecting the privacy of any company is a crucial best practice. In the past, there have been numerous instances where breaches in security had serious consequences for companies and organizations. Insurers must protect information about their clients’ through compliance with legal standards and guidelines. The SEC has recently released new guidelines to promote data security to mitigate risk and breach of information. In 2012, new legislations and regulations are still expected to come.
- Increased Inspection by OFAC: The Office of Foreign Asset Control (OFAC) monitors trade and compliance with sanction policies. Now insurers will be under strict scrutiny by the OFAC, and they are prohibited from engaging in trade with certain nations. These nations are the “Specially Designated Nations” and are only limited to insurers in the U.S.
- FASB and IASB Move Forward: Now there are latest Financial and International accounting standards, for compliance. Insurers are expected to adopt best practices to simplify and improve financial reporting. This will improve insurance and provide more information.
- Insurance Pricing Based on Behavior: In 2012 businesses will be improvising new ways of tracking the behavior of the customer. The pricing will be based on a day to day analysis of how the customer utilizes the product and how important it is.
Insurers will have to be a step ahead of the regulations and compliance changes all through the year.