What is TCF?
TCF is a set of outcomes issued by the Financial Services Conduct Authority (FSCA) and supervisory approach designed to ensure that regulated financial institutions deliver specific, clearly set out fairness outcomes for financial customers. These guidelines govern the way an Insurer or FSP business must conduct itself with its clients, and ensures that all clients are treated fairly, during all stages of the product lifecycle and advice process.
Fair treatment of customers supports the FAIS General Code of Conduct for financial services providers (FSPs) and the Policyholder Protection Rules (PPR’s) for Insurers. Although the TCF principles may already form part of the culture of RMA’s business, the demonstration of the outcomes may not yet be fully in place and changes to some business processes may be required, and in some cases new processes may need to be implemented.
How is TCF implemented?
The TCF framework is built on principles that help drive an Insurer or FSP’s business conduct towards a set of six outcomes. An Insurer or FSP therefore needs to move towards achieving these outcomes in its business processes and TCF becoming an inherent part of all areas within the business. The company must also be able to demonstrate to the regulators that it adheres to the TCF principles and treats their customers fairly, by documenting the implementation of new business processes.
What is the FSCA looking to achieve through the TCF outcomes?
By placing our clients at the center of our business and aiming to achieve the six TCF outcomes to the fullest, this will ensure a win-win situation for everybody. The TCF outcomes are defined by the FSCA as the following:
⦁ TCF Outcome 1 – Culture & Governance - Customers must feel confident that they are dealing with an institution where TCF is at the core of their culture.
⦁ TCF Outcome 2 – Product Suitability - Products and services in the retail market which are sold and marketed are designed according to the needs of the customers identified and targeted accordingly.
⦁ TCF Outcome 3 – Disclosure - Customers are provided with clear information and kept appropriately informed before, during and after point of sale.
⦁ TCF Outcome 4 – Suitable Advice - Advice is suitable and according to the customer’s circumstances.
⦁ TCF Outcome 5 – Performance and Service in line with expectations - Service is of an acceptable standard and products perform as customers have been led to expect.
⦁ TCF Outcome 6 – Claims, Complaints & Changes - Customers do not face unreasonable post-sale barriers when they want to change a product, switch providers, submit a claim or make a complaint.
The TCF principles are incorporated into the TCF outcomes and in many ways are also embodied in the FAIS General Code of Conduct, Insurance Act and the Policyholder Protection Rules (PPR’s). Although these principles may already form part of RMA’s business strategy, they are linked to outcomes that focus specifically on the fair treatment of the customer.
The FSCA provides guidance regarding its TCF expectations, however, businesses are expected to identify ways in which they can integrate these principles in all areas of the business to ensure that the right outcomes are achieved. Incorporating TCF in our business ensures that RMA complies with regulation and in turn results in fewer complaints from clients. Clients who are treated fairly are more likely to remain loyal clients and an asset to RMA’s business.
What is RMA doing to ensure we comply with TCF?
The Legal & Compliance Department will provide support to the business to help them understand the TCF requirements:
⦁ Engagement sessions to understand the requirements
⦁ TCF self-assessment workshops to align with the TCF framework
Following the identification of all the gaps, business process will be improved to reduce these gaps.
The TCF Self-Assessment Tool will be rolled out to the business in May and June 2019.