TAL Distribution Risk and Compliance Training

February 2018

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TAL

What do you think of when we say 'Compliance'?

~ VJ ~ Law Industry

Internal rules Regulators'

standards instructions

... but is it more than this?

© O? ~~ c;n}) Internal Partners' Community Our

standards expectations expectations conscience?

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Contractual obl igations

Our social responsibility?

Learning Outcomes

3

By the end of this training, you will:

1. Understand the importance of risk and compliance

2. Have a practical, working understanding of the risk and compliance requirements of your role, including:

i. the reason for the requirement ii. how to fulfil the requirement in practice iii. the potential consequences of non-compliance

3. Have learned skills to think critically about every situation you come across, to avoid non-compliance

4. Know who to go to for help, and how to report an Incident

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Why is compliance important?

Our compliance vision, relevant legislation, key codes, policies,

and procedures

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Our Compliance Vision

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Relevant Legislation

• Corporations Act • Privacy Act • ASIC Act • Life Insurance Act • DNCRAct • Insurance Contracts Act • Telecommunications (Interception and Access) Act • Spam Act

8 TAL

Key Codes, Policies, and Procedures

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LIFE INSURANCE

CODE OF PRACTICE ~ .~

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I

TAL

TAL DAI-ICHI LIFE AUSTRALIA PTY LIMITED ABN 70 050 109 450

Code or Prorassk>Ml & Ethical Conduct

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1,

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Who enforces these obligations?

ASIC

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LIFE CODE COMPLIANCE COMMITTEE

'-"APRA Australian Prudential Regulation Authority

·+ ~ Australian Government

~bit/!·,..;~ Office of the Australian Information Commissioner

FINANCIAL SERVICES COUNCIL •l Austr.tlian Go,·ernmen! ~~~

~:.-±iiliil!'l'P Australian Transaction Reporls and Anal~ ~i.. Cent~

FGS FINANCIAL ')MBJ.)~1'.1AN SERVICE AUSTRALIA

acma but also ... and you!

Let's look at the impacts

On TAL, on our Customers, and on

you as IRs

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TAL

ASIC

APRA Australian Prudential Regulation Authority

f SC LIFE CODE COMPLIANCE COMMITTEE

14

FINANCIAL SERVICES COUNCIL

Australian Government

O ffice of the Au tralian Info rmation Commissioner

FC3S FINANCIAL

SERVICE AUSTRALIA

U'llrullan Co\ernment

u 1rali•n Tr-.n ution Rrports •nd Anal~ i~ Cenlre

acma

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TAL

Licensing

Providing Financial Services and the obligations on AFS

licensees

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Licensing and providing financial services

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Licensing and providing financial services

~ TAL Direct Pty Ltd

AFSL 243260

TAL Direct TAL Consumer

18

~ Lifebroker Pty Ltd

AFSL 400209

Life broker

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General Obligations of a financial services licensee

19

A financial services licensee must:

./ do all things necessary to ensure that the financial services covered by the licence are provided efficiently, honestly and fairly; and

./ have in place adequate arrangements for the management of conflicts of interest that may arise; and

./ comply with the conditions on the licence; and

./ comply with financial services laws; and

./ take reasonable steps to ensure that its representatives comply with the financial services laws; and

./ have available adequate resources (including financial , technological and human resources) to provide the financial services covered by the licence and to carry out supervisory arrangements; and

./ maintain the competence to provide those financial services; and

./ ensure that its representatives are adequately trained (including by complying with s 921 D continuing professional development standards), and are competent, to provide those financial services; and

./ have a dispute resolution system; and

./ have adequate risk management systems; and

./ comply with any other obligations that are prescribed by Regulations.

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What are you authorised to provide? Are you trained and authorised by TAL to provide a financial service in respect of the following topics?

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TAL

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Obligations

Call Recording and notification

TAL

Notifying Call Recording

We cannot record a phone call unless all parties know that it is being recorded. This is called "interception" under the Telecommunications (Interception and Access) Act (Cth).

The notification you must give at the start of each call is very simple:

"All of our calls are recorded for quality and training."

You should notify the customer (and anyone else who might get onto the phone) as soon as reasonably possible - certainly before any material components of the quote or sale are undertaken, or before you ask the customer for their personal information.

In general, it is acceptable to make the notification when you gain control of the call, and have a reasonable and suitable opportunity to mention it. Usually, this is after the greetings have been made, the reason for the call established with the customer and they consent to proceed past the introduction.

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Notifying Call Recording

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Obligations

Why is privacy important?, Privacy policy, collecting

sensitive information, how we protect information, access types, accuracy of customer

information, opt out

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Privacy Policy

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This policy gives the customer important information that the customer will need before deciding on whether they

want to give us their personal information

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Collecting Sensitive Information

0 CONSENT

( Voluntary J [ Informed ] , "'I

[ J Current Specific 27

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How we Protect Information

Password Identification protection checks

CRM user Physical security

access measures

restrictions File encryption

File entry tracks Address

verification

IT security Policy access measures permissions

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Access Types

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29

,

Client access Co-owner access

Authariaed access Financial access

Life insured access Legal representative access

Disclosing overdue premium amounts

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Power of Attorney

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Accuracy of Customer Information

Collect

Update

Use and Disclose

Customer Requests

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Direct Marketing

31

Direct marketing involves the use and/or disclosure of personal information to communicate directly with an individual

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Opt Out of Direct Marketing

Do Not Call Register

32

ACMA maintains a nationwide "Do Not Call Register" (DNCR). Each company conducting direct marketing calls has to check their dialling lists against this register before they attempt to call people.

TAL (and every other company that markets by telephone) also maintain their own "Do Not Contact" (DNC) lists, so they can keep track of who doesn't want to be called specifically by them.

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Disclosure Documents

The Financial Services Guide and the Product Disclosure

Statement

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Financial Services Guide (FSG)

An FSG contains information about the company offering the financial service, such as what licence they are authorised under, what sort of services they can provide, who they're associated with , how they earn money, how to contact them, and make a complaint about them.

A financial services licensee must give their customers a Financial Services Guide.

34

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Product Disclosure Statement (PDS)

A Product Disclosure Statement contains all the information about the product that the customer needs in order to understand how it works and be able to decide whether it's suitable for them, and whether they should buy it.

We must give a person a PDS for a financial product if we offer to issue or sell the financial product to the person.

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TAL Lifetime Pr .

Built by You, For You

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Activity

Go to the FSG of your licensee. • What is the AFSL number? • • • •

What are the contact details for making a complaint? Who makes money when a policy is sold? Who owns the licensee? Does it have any relationship with the insurer( s) it deals with?

Go to the PDS of a product you sell. • Who issues the product? • Can you identify the exclusions on the policy? • When does cover expire? • Do the terms of cover change at a certain age? • Where are the definitions of terms kept? • Can a superannuation fund own the policy?

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TAL Financial Services Guide 19Aprtl201ti

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Advice Models

Factual Information and financial product advice

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Overview

Factual information General Advice

CD

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Factual Information

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What is factual information?

Factual information is objectively ascertainable information, the accuracy of which cannot be questioned. You do not need to hold a license to be able to provide it.

"You have an outstanding premium amount of $96.20 owing."

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What is financial product advice?

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"In general, these products may suit people who have had serious medical conditions in the past."

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General financial product advice

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General advice is financial product advice that does not consider the financial situation, needs or objectives of the person it is being given to.

"The great thing about personal insurance products is the peace of mind they bring - they can help reduce the

stress that life's risks cause us.11

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General Advice Warning

43

You must provide the customer with a warning before you provide any general advice.

The general advice warning is quite simple. It is:

"I can only provide general advice; it may not be appropriate for you."

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Personal financial product advice

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Personal Advice is financial product advice where the person giving that advice has considered one or more of the customer's financial situation, objectives or needs, or a reasonable person in the shoes of the customer would think that they had done so.

Personal advice can include recommending a customer to:

Increase or decrease cover, or cancel cover (including yours or a competitor's)

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When asked for personal advice

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A customer may ask you what they should do in a particular situation - e.g. which option they should choose, or how much cover is right for them. This is not a bad thing - people find it hard to make these decisions because none of us know what the future holds.

"If it's helpful , it's often useful to think about any debts, maintenance of dependents into the future, and final expenses. That may help you to find a

starting point"

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Sales Methodology

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Our sales methodology asks that you get to know your customer - specifically by understanding the things they would like to fix, avoid or accomplish by taking out insurance -this is not for the purpose of giving personal advice.

The reason it is important to understand your customer's situation and needs is to ensure that you can: • discuss relevant products and product features or options (factual information), and • provide useful general advice, such as the sorts of matters a customer might generally wish

to turn their mind to when making decisions about which product(s) to purchase, which features are going to be useful to them, and the general factors they may consider in deciding how much cover they may seek.

The customer makes their own decision on the basis of this factual information and general advice.

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Recap

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Customer Care

You

Qualified financial adviser

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)( )(

)(

Using advice

48

Sell me this pen

Using personal advice

Now use general advice

And finally use factual information

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Activity Are the following statements personal advice, general advice or factual information?

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Statement

Your life insurance can be paid via direct debit or credit card.

Lets get this Income Protection in place so that if something happens to you, that mortgage can still be paid.

Taking out this insurance will ensure you are paid if you are diagnosed as terminally ill, where as your existing policy doesn't have that option .

Generally, people with a mortgage will sometimes consider the amount they would need to cover their mortgage as well as final expenses when looking at cover amounts. Keeping that mind , how much would you need?

With this policy ,if you were unable to work and your claim was approved then you'd have to wait 28 days before your benefits started to accrue.

With the benefit period its completely up to you, I can tell you that generally speaking that claims for our Income Protection have lasted on average about 8 months

Generally speaking, you may want to increase th is cover above $500,000 because your loan is $700,000 on its own, then there's final expenses to consider

Advice?

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Hawking

What is it?

Why do we have anti-hawking legislation?

How it relates to solicited/unsolicited calls

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Solicited vs Unsolicited

51

Solicited

A person makes positive, clear and informed request to be contacted in

relation to life insurance, and we respond.

Unsalk:llal

We (ar aur paberCD" repraaenbdive) lllllke c:anbdwilh a persan ID alfarlhem a

praduct. wlBIDlll:a raquest rrum them

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Anti-hawking provisions

52

Where contact with a prospective customer is unsolicited, you must follow the unsolicited call procedure to ensure you comply with the anti-hawking legislation.

----- --------- ----------------------------------0 • Contact during the appropriate hours • Contact only with persons not listed on a "No ContacUNo Call" register

• Provide the person with an opportunity to opt out of future calls ~ • Provide an opportunity to select time and frequency of future contacts

------ ----------

~ • Provide the PDS before the person is bound by to acquire a financial product • Provide an indication of the nature of the information contained in the PDS • Inform the person of the importance of using the information in the Product

© Disclosure Statement when making a decision to acquire a financial product • Offer to read out any information in the PDS

----- ---------· ---------------------@ • Provide the name and contact details of the product issuer

----- ----------@ • Prohibition on influencing customer's decision to not receive information ----- ---------

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Expectations

54

What behaviours do we expect from you?

Our customers understand and value the protection they have and are confident we will

be there when they need us most

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• Honest • Clear • Fair • Efficient • Knowledgeable • Competent • Polite • Respectful

TAL

Key Code of Practice customer promises

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LIFE INSURANCE

CODE OF PRACTICE

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Customers Requiring Additional support

56

state trustees

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Unacceptable Sales Conduct

Unacceptable selling practices, misleading and deceptive conduct,

harassment, coercion, pressure selling, unconscionable conduct

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Unacceptable/prohibited selling practices and the ASIC Act

58

Lying about the coverage or cost of a policy

Putting false information into systems and files

Misleading or deceptive conduct We are prohibited from engaging in conduct that misleads or deceives, or is likely to mislead or deceive.

This includes: • Lying to a customer, creating a false impression, making up information, or otherwise leading them to or not

correcting a wrong conclusion; • Leaving out (or hiding) important information - that is, information that would be relevant to a decision the customer

is trying to make, but what we omit to mention; • Making false comparisons - such as between our and a competitor's product or service; • Silence can also be considered to be misleading if it is reasonable for the customer to expect us to speak up and tell

them something relevant that we know. 'Silence' in the context of a phone call could include changing the subject to avoid answering a question;

• Entering false information into systems - for example, if the customer makes an underwriting disclosure and you don't put it in, you will mislead the insurer, who is trying to assess the risk of taking on the customer.

Unfortunately, it doesn't matter whether we intended to mislead or to deceive or not. It is the effect on the other person that matters. If you think you forgot to tell the customer something important, you should always call them back to give that information and check to see if their decision changes.

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How to make sure you don't mislead or deceive

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Harassment, Coercion and Pressure Selling

61

These words mean exactly what they mean in everyday life. In the context of sales:

• Pressure selling is the practice of pushing for a sale by pursuing the customer in a persistent and relentless manner. It often involves forcing immediate decisions, preventing a customer from making a considered judgment with sufficient time, creating stress, and aggressive or tricky tactics

designed to push the customer toward a particular outcome.

• Harassing a person means doing something repeatedly to cause a customer to feel worn down, tired , demoralised or intimidated. It can include repeatedly pushing a point or argument, asking the

same thing over and over, or calling a person repeatedly.

• Coercion is the use of force to make a customer purchase a policy or make a decision. It can involve exploiting a situation to force an outcome, using threats or negative insinuations, leaving a

customer with no choice, refusing to listen to or meet objections, and refusing to take 'no' as an answer.

These are unethical and unsophisticated selling techniques that TAL does not tolerate in its sales teams. They result in poor customer experiences, cancelled policies, complaints,

potential regulator action and fines,-and personal and brand reputation damage.

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How to make sure you do not harass, coerce, or use pressure selling tactics

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We are here to help a customer make confident decisions about life insurance -not to force them to purchase anything. Success in sales always comes from

creating trust; never by using force.

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Unconscionable Conduct Unconscionable conduct is conduct that is so unreasonable or harsh as to defy good conscience.

It occurs where an individual or an organisation acts in a way that is contrary to the morals and norms of our society and community (i.e.

what is expected by the public and by the industry).

It often involves some element of unfairness or unethical behaviour, intent or knowledge that one is doing the wrong thing, or a failure to exercise an appropriate duty of care, or taking advantage of a person's vulnerability or lack of knowledge.

It can include behaviours such as:

• lying;

• unreasonable failure to inform customer of information;

• intentionally providing incorrect information;

• intimidatory or predatory behaviour, such as bullying or coercing weaker parties;

• taking advantage of or exploiting the vulnerable, the disadvantaged, or those with special needs;

• improperly leveraging a significant advantage over another party, or using information against them; and

• other forms of unreasonable or unethical behaviour.

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TAL does not tolerate this type of conduct under an circumstances. Serious consequences apply, including revocation of authority to provide financial

services on behalf of TAL, or even termination of employment.

How to make sure you do not engage in conduct that is unconscionable

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You will receive additional, detailed training on how to engage with customers who are vulnerable, disadvantaged, or have

additional needs and necessitate a higher duty of care.

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When a customer is unlikely to ever be able to claim on their policy

TAL's sales representatives should not sell policies where the customer is unlikely to ever be eligible to claim the benefits under the policy. Where it becomes clear that this is likely to be the case, a sales representative should stop attempting to sell the policy. This is not only a Life Code requirement - it is also clearly the right thing to do.

Every customer, and therefore every situation, will be different. That makes it difficult to provide an exhaustive list of the situations in which a customer would have little or no likelihood of ever being able to receive a benefit in relation to a policy. This is why it is of utmost importance that you understand in detail the policies you are selling, and can apply critical reasoning to facts that the customer has told you, and so will realise when the customer is unlikely to ever be able to receive a benefit.

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Selling Practices

Product rules and product switching

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Product Rules

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Each product you offer has specific rules relating to how and to whom the product may be sold. Compliance with these rules is required to ensure the integrity of TAL's business, as well as compliance with laws.

You will learn all of these rules when you learn about the products. While in many cases the system is designed to prevent products being offered in the wrong situations, it is very important that you are familiar with these rules and input data into systems correctly to avoid the wrong outcomes - both for TAL and for our customers.

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Product Switching

68

It is important customers are made aware of the risks associated with switching from one product and replacing it with another. The switch can be from one TAL issued product to another TAL product, or from a competitor to TAL.

Often when customers are switching they are making a decision based on price alone and may not have considered the specific terms and conditions of the "from' product and the "to" product and compared them. This is important because while the new product may be cheaper than their existing product the new product may have lesser coverage than their existing product, and they could be in a worse position if they switch.

Furthermore, if customers are underwritten for the new product, the period for which they must make disclosure is updated, with potentially more risk that they will forget to mention something important.

It is important that we warn clients of the risks of switching products. Since we cannot give personal advice, this is a general warning that applies to everyone. We call this the Product Replacement Warning and you will find it in your script, call flow, or RVA.

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The Insurance Contracts Act

Underwriting, and why this is critical to business sustainability and

paying claims

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TAL

Risk and Insurance

Insurance is a loss spreading/risk transfer arrangement.

• You identify a risk (e.g. that you may get cancer and will have large medical bills to pay). • You seek to transfer that risk to an insurer (so that in the event that you do get cancer, they will pay the money needed to

meet the medical bills - not you). • The insurer spreads the loss amongst its policyholders (everyone pays a little bit so that for the policyholders who do get

cancer, there's a pool of money to use for paying those bills).

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Why would an insurer be careful about what sorts of people it agreed to cover?

If we don't have the important and accurate information about a person, can we provide a standard policy or charge the right price for their risk? Can we assess their levels of risk accordingly?

What might the impacts be on the insurer and existing policyholders if unacceptably high risks are taken on?

How do we work out whether we will insure a person who applies for cover?

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Purpose and outcome of Underwriting

What is the purpose of underwriting?

To collect information about the customer, assess the risk they pose, and decide whether we can cover them (and if so, on what terms).

What is the outcome of robust, properly executed underwriting?

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We can be confident that we have insured suitable risks, that we are receiving the right amount of money, and that we will pay all of our policyholders a claim when the time comes.

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The Insurance Contracts Act and Underwriting The Insurance Contracts Act imposes certain obligations on insurers when they underwrite applicants. Let's go through these and talk about why each is a fair and reasonable requirement.

72

Requirement to inform the applicant of the Duty of Disclosure

If specific questions are asked, the applicant is not to be expected to give additional, unrequested information

If applicant fails to answer/provides an obviously incomplete or irrelevant

answer, and we don't address it, we waive the requirement to disclose

Requirement of the insurer to ask the applicant specific questions in order to

enforce the duty of disclosure

If applicant reasonably misinterprets an ambiguous question, the question has the meaning they understood it to have

If applicant makes a statement they reasonably believed to be true, but was

wrong, they have not made a misrepresentation

Underwriting Expectations

When completing application questionnaires with applicants over the phone:

• Read out every question • Read out every question as it is written • Ensure you use the correct pronunciation - medical terms can be tricky! • Speak clearly and at a pace that is easy for the customer to understand

• Record the responses completely and accurately. Record all responses and never incorrectly or inaccurately record (or omit to record) a response.

• Listen actively: • not every answer is a simple yes or no; • not all information may be given by the applicant at the time you expect it; • not every answer may be complete

• Where a range is given, and the customer cannot be more specific, use the answer that is the higher risk (e.g. the more recent date of last symptoms)

• Ask for help from an underwriter where you're unsure

• Don't rush - they need time to consider their answers • Don't 'lead the witness' (don't hint at the answer that will be classed as a lower risk)

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Underwriting Expectations When underwriting over multiple calls • Reiterate the duty of disclosure at the start of each new call, to ensure it is top of mind and clear

that the duty continues to apply

When the policy has a future start date • Ensure the customer is aware that their duty of disclosure continues until the policy starts

Inform the customer of the outcome of their application • Once all the information we need has been collected, the insurer must inform the customer of their

decision (accept, accept with special terms, decline/defer) within 5 business days

If special terms are applied to the proposed policy • Notify the customer of the term(s) and their effect before they make a decision to take up the cover

If alternative terms are offered, or the application is declined • Let the customer know the reasons for the decision, that they have the right to the information

about them that was relied on to make the decision (e.g. doctors' reports), that if the customer disagrees with the decision they can discuss it with the insurer and ask for a review, and if they are not happy with that review, can make a complaint

74

TAL.500.015.0975

TAL.500.015.0976

Selling Practices

Conflict of interest

TAL

Conflicts of Interest We have a companywide Conflict of Interest policy. This should be read in conjunction with the Code of Professional and Ethical Conduct, the Fraud and Corruption Control Policy, and the Whistle-blowers' Protection Policy.

A conflict of interest is a situation where a person acting in their own interests would be acting inconsistently with a duty that they owe to another person or entity. A conflict of interest may be potential or actual. It can occur where an insurance representative is able to utilise their position or ability to take a benefit or otherwise obtain value from the provision of financial services to another person for themselves.

Any policies which have been sold by an IR to family, friends or other staff members must be registered on the possible Conflicts of Interest register. Notification should be made immediately and directly to the compliance team via email (TALDirectComplianceQueries@tal.com.au) from the IR/SPL responsible for the sale. The email should include:

• Your name;

• Who the policy was for (e.g. your parent or friend);

• The identifying policy number;

• Who sold the policy.

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TAL.500.015.0977

Selling Practices

Remediation and internal dispute resolution

TAL.500.015.0978

TAL

Remediation

If a company gets something wrong, what are your expectations as a customer?

78

• •

TAL.500.015.0979

Internal Dispute Resolution

A complaint is:

'Any expression of dissatisfaction made to an organisation, related to its products or services, or the complaints handling process itself, where a response or a resolution is explicitly or implicitly expected.'

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TAL.500.015.0980

TAL.500.015.0981

External Dispute Resolution If a person makes a complaint or has an issue with how we did something, and we cannot resolve it with them, the matter may be escalated or reported outside of TAL. The result is an externally enforceable decision.

F~S

ASIC

80

FINANCIAL O~ BJD5tv1AN SERVICE AUSTRALIA

LIFE CODE COMPLIANCE COMMITTEE

acma

FINANCIAL SERVICES COUNCIL

~ Superannuation Complaints ml! Tribunal

•• 1~ Australian Government

~·1I+,.,,... Office of tbc Australian Information Commissioner

TAL.500.015.0982

TAL

Compliance Program

Reference and support materials, assistance

TAL.500.015.0983

TAL

Scripts and Sales Flows

83

Pertonnance and Protection Mindset

1. Early and active panlclpatlon

" h1!foduee )Q.11')¢t( M 'll Acp«tSertofr,, of TAL Cll'°" .. tnc11no as lllsuraoc.Une'

,. ~dfNRVA1atth•fiCSlrt•tonablf opporNnlty

./ lfRVA 1(aflnot be played readtOO "PrnuUtio.i RYA"' • Cript lnthit dOCUlfltlnt

f'hi) PJcsenhttlon RVA

I ,. Cortrm customer under&an:Js & Is nappy to j)(OCee

TAL.500.015.0985

Reference Materials • Your scripUcall flow

• Your training material

• Sales Practices Guideline

• TOA Code of Professional and Ethical Conduct • TOA - Risk Management Strategy (RMS) • TOA - Risk Appetite Statement (RAS)

• TOA Conflicts of Interest Policy

• TOA Fraud and Corruption Control Policy

• TAL Incident and Breach Management Procedure

• TAL Guide to engaging with customers who are vulnerable, disadvantaged, and have additional needs

• Underwriting, Product & Quality Assurance bulletins

• Your licensee's Privacy Policy and Financial Services Guide, and Product Disclosure Statement(s) • TAL Distribution Compliance Participant Workbook

84

Hereto Help

Training & Coaching

SPL/SPC

85

Risk and Compliance

IR

TAL.500.015.0986

QA

Underwriting

Compliance Program

3 lines of defence, Control , Monitoring and Supervision

TAL.500.015.0987

TAL

3 Lines of Defense Model

TAL's risk governance is underpinned by the 'three lines of defence' model to facilitate the monitoring, oversight and escalation of risks to Business Unit Management, Executive Team Members, the Group CEO and Managing Director and the Board.

87

LINE3 TAL INTERNAL AUDIT

On-going review and updates of framework

Quarterly reporting to Risk committee/ Audit committee/ Board

Review and update of risk activities

Framework: RMF, RAS, RMS

LINE2 GOVERNANCE &

CHALLENGE

Reporting to ERC by Line 1 & 2 Risk

LINE1 CONTINUOUS

MONITORING & QUALITY

· Rls & Con rol Self Ass ssment

TAL.500.015.0988

Supervision

88

I ••• . • •• -I I •

In Distribution, we conduct a range of call monitoring, file and system checks, and audits, to: • confirm that all salespeople and support officers are adhering to expectations; • knowledge and skills remain up to date and effective; • systems and processes are working as envisioned; • issues are being detected and remediated in a timely and proper fashion; and • everyone is given timely feedback on any issues to ensure they can address them early.

Collectively, these supervisory actions are part of a set of measures collectively known as "assurance" - where the company assures itself that its people and systems are working and doing the right thing.

TAL.500.015.0989

Incidents

89

Near miss is a term we use in Distribution where an event comes close to becoming an Incident but does not eventuate that way, although not due to the operation of a control mechanism or skill. Near misses are generally prevented from becoming Incidents by chance or circumstance.

Incident means events which have, or may have, the potential to cause negative financial, reputational, regulatory or internal operational impacts on TAL, TAL's customers, business partners and other stakeholders

A Breach is an Incident resulting in an actual failure to comply with obligations arising from regulations, laws, codes or internal policies and procedures applicable to TAL. Not all Incidents are Breaches.

TAL.500.015.0990

Compliance Program

Compliance Scoring and consequence management

TAL.500.015.0991

TAL

Compliance Scoring

Compliance is rewarded at TAL, both by recognising your performance and through

financial reward.

If during the monitoring process, you are found to have not complied with certain

obligations, whether regulatory or otherwise, you may be allocated 'demerit points' based

on the severity and risk of the non-compliance, and the number of times you have failed

to comply. Any demerit points you receive are worked off by future compliance; but

sustained non-compliance will result in the points adding up.

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TAL.500.015.0992

TAL

Consequence Management Through your compliance performance, we are able to reward you for meeting expectations. When

expectations are not met, the consequences are managed through a tiered system designed to ensure

feedback and coaching is provided at every level, to give you the tools and help you need to get back on

track.

92

Total Points

0

1 - 14

15-20

Over 20

Over 30

Coaching, training, and performance management

Excellent work. We recognise our top performers as compliance role models.

You receive feedback on errors and train ing to help you avoid the issue in future (corrective coaching).

Because by this stage there have been multiple or serious issues, an informal warning may be issued. You will continue to receive corrective coaching.

A formal warning may be issued. We intervene and place you on a plan where you spend time listening to calls and undergoing training. Your work is more closely supervised and monitored.

Commission impact

You receive a 10% increase to any sales commission you have earned

Commission is unaffected

Commission is unaffected

Your total commission is 50% of what is normally payable.

We generally recommend that you don't continue to sell pol icies. You may be retrained or placed in a different role.

TAL.500.015.0993

TAL.500.015.0994

TAL

Key Messages

1.

2.

3.

4.

94

Make every effort to be well-informed. Understand the rules and why they are there, the products you sell , and the expectations that apply to all companies in this industry.

Follow procedures, treat people and their information as you would wish to be treated, and act according to your conscience.

Speak up if you've made a mistake. Many mistakes can be fixed before they cause a negative impact, and most customers are understanding and forgiving if you pick up the issue first.

If you are ever unsure, ask. Someone will always help you .

TAL.500.015.0995

TAL

TAL.500.015.0996

Questions

95

TAL.500.015.0997

Assessment

Cl-

96

TAL.500.015.0998