Business culture is a key driver of conduct, and more can be done to promote a "positive culture in financial institutions", said a senior Monetary Authority of Singapore (MAS) official yesterday.
Mr Lee Boon Ngiap, MAS' assistant managing director of capital markets, said financial institutions can expect MAS to "engage them more regularly on what they are doing within their own organisations to shape the right culture".
Mr Lee was speaking at the Life Insurance Association Singapore's (LIA) annual lunch at Grand Copthorne Waterfront Hotel. It was held after LIA's annual general meeting and election of office-bearers and management board for this year.
He noted the growing regulatory emphasis on culture and conduct in recent years, adding that the financial industry has continued to be "dogged by egregious misconduct" since the 2008 financial crisis.
While the life insurance industry may not have been at the forefront of the major misconduct cases making global headlines, some of these "involve mis-selling of products and inappropriate advice", said Mr Lee.
He highlighted several existing initiatives, such as guidelines on fair dealing in April 2009 and the balanced scorecard framework, which includes factors such as customer feedback when rewarding financial advisers, under the Financial Advisory Industry Review.
Newly elected LIA president Patrick Teow said the industry is working to implement more recommendations under the review this year.
For instance, "benefit illustrations" will be renamed "policy illustrations", and there will be new disclosures on bundled products, such as those with both insurance and savings elements.
LIA deputy president Ken Ng said: "The idea is how we can unbundle these in the illustration to show how much is pure insurance and how much is savings. It's more for participating products.
"We want to give consumers more information on what the bundled products are composed of - and target implementation (for) next year ."
Mr Teow said these recommendations are still being discussed, and others, such as a 55 per cent cap on first-year commission, are waiting for the green light.
Mr Lee said more could be done to promote good culture, such as board and senior management "walking the talk", and that remuneration policies must not just motivate high performance based on sales or profits, but also penalise poor conduct.
Firms should also always seek to identify if there is a root cause of bad behaviour, and fix that so the problem "goes away for good", said Mr Lee.
Mr Teow, who is also AIA Singapore chief executive, said that besides working on enhancing consumer interest, LIA is also committed to creating "digital innovations aimed at increasing choice, lowering costs and offering greater convenience".
He said LIA will do a new protection gap study soon.