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🧱 '''Chinese wall''' — more recently referred to as an information barrier or ethical wall — is an internal organizational control within an insurance company, [[Definition:Brokerage | brokerage]], [[Definition:Investment bank | investment bank]], or advisory firm that prevents the flow of confidential or [[Definition:Material non-public information | material non-public information]] between teams or divisions whose simultaneous access to that information would create a [[Definition:Conflict of interest | conflict of interest]] or violate regulatory requirements. In the insurance industry, these barriers arise frequently: a global [[Definition:Insurance broker | broker]] may simultaneously advise a carrier on an [[Definition:Mergers and acquisitions (M&A) | M&A]] transaction while placing [[Definition:Reinsurance | reinsurance]] for a competitor of that carrier, or an [[Definition:Investment bank | investment bank]] may be running a sell-side [[Definition:Auction | auction]] for one insurer while its asset-management arm holds a significant position in a rival bidder.

🔒 Implementation involves a combination of physical, technological, and procedural safeguards. Staff on one side of the wall are restricted from accessing the files, emails, and systems of the team on the other side; deal-code-name protocols limit the visibility of transaction identities; and compliance officers maintain restricted lists of individuals who have been "brought over the wall" with appropriate authorization. In insurance-specific contexts, [[Definition:Lloyd's of London | Lloyd's]] has detailed protocols governing information barriers between [[Definition:Syndicate | syndicates]] managed by the same [[Definition:Managing agent | managing agent]], particularly when those syndicates compete for the same [[Definition:Binding authority agreement | binding authority]] business or participate in overlapping layers of the same [[Definition:Reinsurance program | reinsurance program]]. Similarly, insurance [[Definition:Holding company | holding companies]] with both [[Definition:Underwriting | underwriting]] and [[Definition:Investment management | investment management]] arms must maintain robust walls to ensure that knowledge of pending large [[Definition:Claim | claims]] or [[Definition:Reserve | reserve]] adjustments does not influence trading in the company's own securities or those of its counterparties.

⚠️ A failure in these controls can trigger severe consequences — regulatory sanctions, voided transactions, litigation, and lasting reputational harm. Regulators such as the [[Definition:Financial Conduct Authority (FCA) | FCA]] in the United Kingdom, the [[Definition:Securities and Exchange Commission (SEC) | SEC]] in the United States, and the [[Definition:Monetary Authority of Singapore (MAS) | Monetary Authority of Singapore]] treat information-barrier breakdowns as serious compliance failures. For the insurance industry, where trust and confidentiality underpin relationships between [[Definition:Cedant | cedants]], [[Definition:Reinsurance | reinsurers]], brokers, and capital providers, maintaining credible information barriers is not merely a legal obligation but a commercial necessity. As [[Definition:Insurtech | insurtech]] platforms and data-sharing arrangements create new vectors for information leakage, the design and monitoring of these controls continue to grow more complex.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Conflict of interest]]
* [[Definition:Regulatory compliance]]
* [[Definition:Information barrier]]
* [[Definition:Material non-public information]]
* [[Definition:Lloyd's of London]]
* [[Definition:Fiduciary duty]]
{{Div col end}}

Definition:Chinese wall - Revision history

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