Singapore's MAS reprimands AIA FA, Prudential, Aviva FA & CEO for breach of rules | Singapore Business Review - The Latest News, Headlines, Insight, Commentary & Analysis
,Singapore
23 views

Singapore's MAS reprimands AIA FA, Prudential, Aviva FA & CEO for breach of rules

They failed to properly monitor individuals onboarded as advisors, directors.

The Monetary Authority of Singapore (MAS) has reprimanded AIA Financial Advisers Private Limited (AIA FA), Prudential Assurance Company Singapore, Aviva Ltd. and Aviva Financial Advisers (Aviva FA) for breaches of requirements relating to risk management arrangements and the remuneration of supervisors.

MAS also reprimanded Aviva FA’s CEO and director Chee Book Chai Lionel for his failure to discharge the duties of his office; and Peter Tan Shou Yi, a consultant engaged by Aviva, for accepting remuneration in breach of regulatory requirements, the regulator added in the press release.

Singapore’s regulator revealed that it found numerous instances where remuneration was paid to supervisors in contravention of requirements under the Financial Advisers Act (FAA). These are related to the Balanced Scorecard requirements (BSC) for the sale of investment products, and the Spreading and Capping of Commissions requirements (SCC) for the sale of regular premium life policies.

Under the BSC, supervisors’ and representativesvariable income are determined with reference to the fulfillment of non-sales key performance indicators (KPIs); whilst under the SCC, insurers and FA firms are required to cap the variable income payable to representatives and supervisors in the first year and spread the remaining variable income payable over a prescribed period.

AIA FA reportedly failed to review and assess the performance of its three managing directors (MDs) who were responsible for the supervision of conduct and performance in their respective agency groups, including sales and compliance standards.

AIA FA also failed to assign BSC grades as well as determine and pay their remuneration in accordance with the BSC, and to cap and spread the MDs’ variable income in accordance with the SCC, MAS said.

Meanwhile, Aviva was reprimanded for failing to put in place compliance arrangements to monitor Tan’s actions in Aviva FA.

Aviva engaged Tan as a consultant from July 2016 to March 2020, to provide strategic advice on Aviva FA’s business. During this period, however, MAS said that Tan went beyond providing strategic advice and acted as a supervisor to Aviva FA’s representatives. Tan reportedly had frequent and direct interactions with Aviva FA’s representatives, including discussions on sales and compliance issues.

By failing to put compliance arrangements, Aviva and Aviva FA contravened the Guidelines on Risk Management Practices–Internal Controls (RM Guidelines) and the Financial Advisers Regulations, respectively, according to MAS.

Mr. Tan had acted as a supervisor of Aviva FA by virtue of his roles and responsibilities in the firm, but Aviva FA failed to review and assess Mr. Tan’s performance, assign a BSC grade to him, and determine and pay his remuneration in accordance with the BSC. Aviva also failed to cap and spread his variable income in accordance with the SCC. In accepting such remuneration, Mr. Tan also breached the SCC,” MAS said in a press release.

In relation to the above, MAS also reprimanded Aviva FA CEO and director Chee for his failure to ensure that Aviva FA put in place arrangements to monitor Tan’s activities.

According to MAS, Chee did not properly address the issue of poor conduct of Aviva FA’s representatives, which included misrepresentations to customers regarding the nature and features of certain insurance products. This is despite MASrepeated supervisory engagements with Aviva FA between August 2017 and September 2018 over the sales conduct of its representatives; the regulator said that even after these engagements, the measures put in place by Aviva FA to address these issues remained inadequate.

MAS said that it has since directed Aviva FA to appoint independent external persons to reportedly conduct a holistic review of the company’s internal control processes, and to perform call-backs to all customers before any sales are completed. These measures are still in place.

Meanwhile, Prudential was reprimanded for failing to review and assess the performance of three individuals--which the firm referred to as Master Group Agency Manager (MGAM) Leaders and a consultant-- it had appointed as supervisors.

Prudential also failed to assign BSC grades to these three individuals, as well as determine and pay their remuneration in accordance with the BSC requirements.

Prudential also breached the RM Guidelines as it failed to put in place adequate risk mitigation procedures and compliance arrangements to monitor the MGAM Leaders’ and Consultant’s activities, MAS said.

 

Get Singapore Business Review - The Latest News, Headlines, Insight, Commentary & Analysis in your inbox
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

This included one-off partial distribution of divestment gains of S$20m.
This is attributed to the lower rental reliefs to retail tenants at Festival Walk and higher average occupancy from IXINAL Monzen-nakacho Building.
The Tripartite Committee on Workplace Fairness targets to complete its work by H1 2022.
A total of 811 condos were sold in the last quarter, the highest since Q4 2010.
The SMAs are focused on global infrastructure projects.
The company said their income was driven by its latest acquisitions.
The Jobs Support Scheme has been extended to 18 August.
The bank is now allowing small- and medium-sized enterprises to avail the loan digitally.
And Health Ministry clarifies roadmap in treating COVID as endemic remains.
Inflation for all items meanwhile remained unchanged at 2.4% YoY.
SMEs that qualify for the UOB Start digital pack will be offered six months of free access.
This was supported by grants extended by the government, such as the Jobs Support Scheme.
The group’s profits after tax ballooned by as much as 138.4%.
It is comprised of a 10-, 20-, and 40-year USD Temasek Bonds.
This was linked to the higher average selling prices amidst rising coal prices.