Thematic Review

Instead of inspecting one firm across all its activities, the regulator picks a topic, such as complaint handling, fees disclosure or financial crime controls, and gathers evidence from a sample of firms through questionnaires, file reviews and interviews. Results are compared across the group. The regulator then publishes a report on good and poor practice, may write to firms with its expectations, and can take action where it found clear breaches. Some regulators call the exercise a sweep. Topics are chosen because of complaints, market events or emerging risk. Even firms that were not sampled often read the report and compare their own practice to it. Compliance heads often treat a freshly published review as a preview of the questions in the next inspection.

Twenty-five insurers are reviewed by a conduct regulator on how they handle claims from customers in financial difficulty. Staff read 40 files at each firm and interview claims managers. The published report finds that most firms take too long to reply and that several do not record why claims were rejected. The regulator sends a letter to all insurers setting out its expectations and opens an investigation into two firms.