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🏛️ '''Insurance conduct of business''' encompasses the rules, standards, and regulatory expectations that govern how [[Definition:Insurance carrier | insurers]], [[Definition:Insurance intermediary | intermediaries]], and other market participants interact with [[Definition:Policyholder | policyholders]] and prospective customers throughout the insurance lifecycle — from marketing and sales through [[Definition:Underwriting | underwriting]], [[Definition:Policy administration | policy servicing]], and [[Definition:Claim | claims]] handling. While [[Definition:Solvency | solvency]] regulation focuses on whether a carrier can pay its obligations, conduct-of-business regulation asks whether it treats its customers fairly and transparently in doing so. Jurisdictions around the world have developed conduct frameworks — the UK's [[Definition:Financial Conduct Authority (FCA) | FCA]] Consumer Duty, the EU's [[Definition:Insurance Distribution Directive (IDD) | Insurance Distribution Directive]], and various U.S. state [[Definition:Market conduct | market conduct]] statutes are prominent examples.

📋 In practice, conduct-of-business requirements touch nearly every operational function. [[Definition:Insurance agent | Agents]] and [[Definition:Insurance broker | brokers]] must disclose their compensation arrangements, avoid conflicts of interest, and ensure that recommended products are suitable for the customer's needs — a principle sometimes codified as a [[Definition:Suitability requirement | suitability]] or [[Definition:Best interest standard | best-interest]] standard. Carriers must provide clear, accurate [[Definition:Policy document | policy documentation]], process [[Definition:Claim | claims]] promptly and fairly, and avoid [[Definition:Unfair claims practice | unfair practices]] such as unreasonable delays or lowball settlement offers. [[Definition:Insurance regulator | Regulators]] enforce these requirements through [[Definition:Market conduct examination | market conduct examinations]], complaint analysis, and, where violations are found, corrective orders or monetary penalties.

🔍 Growing regulatory emphasis on conduct reflects a broader recognition that financial soundness alone does not guarantee good customer outcomes. High-profile scandals — mis-sold [[Definition:Payment protection insurance (PPI) | payment protection insurance]] in the UK, churning of [[Definition:Life insurance | life insurance]] policies in the U.S. — demonstrated the damage that poor conduct inflicts on consumers and on industry credibility. For [[Definition:Insurtech | insurtech]] companies, conduct considerations are embedded from day one: digital distribution channels must still comply with disclosure and suitability rules, algorithmic [[Definition:Underwriting | underwriting]] must not produce [[Definition:Unfair discrimination | unfairly discriminatory]] outcomes, and automated [[Definition:Claim | claims]] processes must meet the same fairness standards as traditional ones. Firms that embed strong conduct cultures tend to benefit from lower regulatory friction, stronger customer retention, and reputational resilience.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Market conduct]]
* [[Definition:Market conduct examination]]
* [[Definition:Insurance Distribution Directive (IDD)]]
* [[Definition:Consumer protection]]
* [[Definition:Unfair claims practice]]
* [[Definition:Suitability requirement]]
{{Div col end}}

Definition:Insurance conduct of business - Revision history

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