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From: Diane Blanchard:
Sent: Mon 11/04/2016 9:34:20 AM (UTC)
To: Victoria Mossf
Subject: FW: MI meeting next week
Here you go......
Diane Blanchard
PA to Tim Parker, Chairman &
Alwen Lyons, Company Secretary
Finsbury Dials
20 Finsbury Street
London
EC2Y 9AQ
From: Jane MacLeod
Sent: 10 April 2016 23:57
To: sarah.t.istedy” ann-marie.stone@
Cc: Nicholas Kennett; Jonathan E Hill; Susie Haywart
Subject: RE: MI meeting next week
Ben Foat; Alwen Lyons; joe.foxi GRO
Hi Sarah
Thanks for your email.
Just so we’re all on the same page (and to those cc’d, please shout if you think my positioning is wrong!), I thought it
might be helpful to re-state the ‘first principles’ behind the proposed session: this arose from a discussion at the GE
training session as to how the POL Board should get oversight of the FS business and assurance that POL is operating
the business appropriately; this obviously stems initially from the board’s collective duties as directors, and is under-
pinned by the fact that POL is an AR for each of POMS and Bol.
Accordingly, I think the starting point must reference what the FS business (in this specific context) comprises, and
what oversight should the POL board have over each aspect? The various components are:
e The insurance distribution business undertaken by POMS which is a regulated entity with its own board.
Accordingly POL’s interest is as a shareholder so what information should it require to have oversight over its
subsidiary?
e In addition, POL acts as AR for POMS in the distribution of certain products through the network — in
particular Over 50s life and travel insurance
e The savings & mortgage products which are sold to consumers through the face to face network channel in
branch, via FS and MS ‘specialists’, and via online and contact centres. POL has no prudential risk in relation
to these products (which is borne by Bol), and the back office processing is also undertaken by Bol. As AR for
Bol, POL has contractual responsibilities to Bol which include regulatory compliance; however the regulatory
risk is borne by Bol
e@ Payment and similar services in branch include bill payment, banking services, Moneygram etc — there are
contractual obligations imposed on POL under each of these contracts.
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e Provision of foreign currency which in turn is sourced from FRES. Depending on how the order for the
currency is placed, the regulatory/AML risk is either born directly by POL or by FRES
e Wholesale foreign currency services operated by FRES which is a separately incorporated company in which
Pol has a 50% shareholding.
It strikes me that each of these raise different issues and responsibilities and therefore potentially different levels of
oversight, and it would be useful to re-consider these different obligations, as that will then drive the type of MI that
should support the Board’s oversight.
The background to this review includes the fact that up until October 2015 the Board had established a separate FS
committee which considered operational and risk issues associated with the FS business. Following the completion of
Hawk at least part of the business of this Committee was taken over by POMS and my concern at the time was that by
reviewing FS risk separately, the ARC was unable to get a proper overview of risk across the business. However since
then the MI that had been provided to the FS committee has not been provided to the Board or any committee at all.
I will separately ask our Company Secretary to circulate the packs for the last 2 Committee meetings in 2015 so as to
indicate the nature of the information provided at that time. This may be helpful in identifying what further
information should be provided to the Board/ARC to ensure that the Board is able to properly discharge its duties.
I hope that this is helpful in positioning the focus of the discussion on Thursday. Please let me know if this is different
to what you expected!
Kind regards,
Jane
Jane MacLeod
General Counsel
Ground Floor
20 Finsbury Street
LONDON
EC2Y 9AQ
Mobile number
From: sarah.t.iste
Sent: 07 April 2016 13:42
To: Jane MacLeod
Ce: ann-marie.stone!_ GRO
Subject: MI meeting next week
Dear Jane,
I hope you are well. We are looking forward to the meeting to discuss MI next Thursday. I am planning to bring along a
fellow partner, Will Amos, who specialises in conduct MI and was previously the director of wholesale and investment
banking at the FCA and so has a strong understanding of what the regulator expects. I think he'll add a lot to the
discussion but please do let me know if you have any concerns about this.
In terms of the meeting itself, would you like us to bring some questions for the group to consider or do you have a
planned agenda already? We're happy to support if you would like us to do so.
I look forward to seeing you next week.
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Kind regards
Sarah
Sarah Isted
PwC I Partner
7 More London Riverside, London, SE1 2RT
http://www.pwe.co.uk
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