From passive financial monitoring to intrusive supervisory engagement : a case study

Abstract

In the wake of the pandemic, many financial firms rushed to change their business strategies, at times exposing deep structural weaknesses. This article examines an insurance company that attempted a change in business model and growth without the necessary governance and competence. The study details how supervisors shifted from passive monitoring to intrusive engagement, ultimately halting new business to force a rebuild of internal controls. This study bridges the gap between abstract theory of regulation and the applied day-to-day mechanics and challenges of supervising the implementation of regulation in practice to achieve the desired consumer protection and financial system integrity outcomes. It reaffirms that where critical situations arise a financial supervisor must quickly shift supervisory approach from a passive monitor to intrusive supervisory engagement.