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Market Trends In Risk and Controls

Updated: Jul 23, 2021

Retail Intermediary Trend Highlights:

Charles Sterling Group remains an active participant in today’s marketplace in helping banks, investment firms, insurance companies and newly named SIFI’s keep up with ever-changing and increased regulatory demands. Demand for executives to lead and transform organization risk and control functions will continue and will, therefore, require a highly proactive recruiting strategy. Here are a few key points that will continue to drive change across financial institutions:

  • FSOC & FIO – Dodd-Frank gave the Financial Stability Oversight Council (FSOC) the responsibility of identifying systemically important financial institutions, or “SIFI,” which will be subject to extra regulatory oversight from the Federal Reserve. The Dodd-Frank Act has also established the Federal Insurance Office (FIO) as a step toward greater federal regulatory involvement in the insurance industry.

  • Solvency – National Association of Insurance Commissioners (NAIC) adopted the Risk Management and Own Risk and Solvency Assessment Model Act in 2012, with the intention of satisfying insurers’ concern regarding the confidentiality of risk assessments and bringing the U.S. insurance regulatory system into equivalence with the European Union’s Solvency II regulations.

  • Risk management continues to evolve and take a more proactive position in organizations. This has greatly impacted the demand for highly technical risk professionals that, at most senior levels, can present to senior management, board level executives and regulators. They must be able to effectively communicate implications to business strategies and the measures the firm is taking to study (model), predict and manage risk across all areas of the firm.

  • AIFMD & FSA – The adherence of AIFMD & FSA rules and regulations for those operating in the EU and foreign markets.

  • Increased regulatory pressures have resulted in corporate-wide reorganizations. New segmentation and alignment, along with better product expertise has impacted reporting structures across all control functions (e.g., Audit, Risk, Compliance, and Legal) globally.

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