Suncorp continued to actively respond to the changing regulatory requirements faced by the financial services industry during 2019–20 and embraced the opportunity to improve customer value, enhance our risk management approach and better meet community expectations.
Under Suncorp’s customer and regulatory engagement program, solid progress has been made in responding to the findings of the Royal Commission, and Risk Governance Self-Assessment outcomes. Scorecards and remuneration frameworks have been updated and the Non-Financial Risk Committee has invested in greater compliance resourcing and improved incident management and risk practices.
Suncorp is compliant with the Sedgwick Remuneration Review Recommendations from 1 July 2020, excluding Recommendation 18 relating to Mortgage Broker remuneration given the Government’s policy reform*.
The COVID-19 pandemic has resulted in the deferral of several key regulatory reforms by the Australian government and regulators, including the implementation of commitments made following the Royal Commission, and Design and Distribution Obligations. Suncorp remains well positioned to meet the new proposed implementation timeframes, where clarity has been provided on the requirements
#Banking Executive Accountability Regime
Suncorp continues to support the principles of the Banking Executive Accountability Regime (BEAR), a regulatory initiative that helps drive greater clarity of accountability and good governance practices across the Australian banking sector. Accountability statements outlining the individual accountabilities for relevant Suncorp executives and Board members have been lodged with the Australian Prudential Regulatory Authority (APRA). All Accountable Persons have a BEAR-compliant remuneration structure. The Suncorp Executive Leadership Team have had this structure since 1 July 2018.
#Breaches & Remediation
We continue to focus on our product design and distribution strategies to enhance customer value and experience.
In 2019-20, Suncorp New Zealand established a customer remediation programme and is currently assessing and remediating a limited number of situations affecting customers.
With oversight from the Australian Securities & Investments Commission (ASIC), Suncorp finalised the remediation of customer outcomes on the quality of advice provided by our former financial planning business, Guardian Advice. We also completed a review and remediation program related to the sale of consumer credit insurance to home and personal lending customers.
In line with statutory requirements and regulator expectations, in 2019–20 Suncorp reviewed its approach to grandfathered commissions. Effective 1 October 2019, Suncorp Financial Services elected to cease receipt of grandfathered commissions, with appropriate benefits passed on to its members. Suncorp Portfolio Services Limited (SPSL), our wholly owned superannuation company with an independent Board, ceased all payments of grandfathered commissions to independent financial advisers on 30 June 2020.
In July 2020, the APRA announced the outcome of its review and licence conditions on the superannuation licence held by SPSL arising from a review of the period 2013–2017. The condition requires SPSL to document how it considers and prioritises members interests when making decisions that materially affect their interests. APRA’s investigation did not conclude that SPSL breached the Superannuation Industry (Supervision) Act 1993.
*This refers to Stephen Sedgwick’s retailbankingremreview.com.au Retail Banking Remuneration Review dated 19 April 2017.