Regulatory Requirements for Insurance Companies

Governance Frameworks for Effective Risk Management

Insurance companies are regulated by a set of rules and guidelines that ensure they operate in a responsible and transparent manner. The following document outlines the key requirements for insurance companies to establish effective governance frameworks, internal controls, and compliance procedures.

Internal Controls

Internal controls are essential for ensuring effective risk management within an insurance company. Here are some key points to consider:

• Establishment of Internal Controls: Insurance companies must establish internal controls to ensure effective risk management.
• Monitoring and Correction: Internal controls should be monitored regularly, and deficiencies corrected as soon as reasonably practicable.
• Annual Review: A review of internal controls should be conducted at least annually, with results reported to the board.

Internal Audit Function

The internal audit function plays a crucial role in assessing risk management strategies, policies, procedures, and controls within an insurance company. Here are some key points to consider:

• Principal Duties: The principal duties of the internal audit function include assessing risk management strategies, policies, procedures, and controls.
• Independence from Management: The internal audit function should be independent from management and report directly to the board.
• Compliance Assessment: The internal audit function must assess compliance with regulatory requirements and internal controls.

Compliance Procedures and Controls

Compliance procedures and controls are essential for ensuring that insurance companies comply with regulatory and AML/CFT obligations. Here are some key points to consider:

• Establishment of Compliance Procedures: Compliance procedures and controls must be established to ensure compliance with regulatory and AML/CFT obligations.
• Adequacy of Controls: Compliance procedures and controls should be adequate to identify compliance breaches and effectively implemented by the insurer.

Compliance Function

The compliance function is responsible for assisting the insurance company in meeting its legal and regulatory obligations. Here are some key points to consider:

• Principal Duties: The principal duties of the compliance function include assisting the insurer in meeting its legal and regulatory obligations.
• Promotion of Compliance Culture: They should promote and sustain a compliance culture within the insurer.

Overall, this document outlines the key requirements for insurance companies to establish effective governance frameworks, internal controls, and compliance procedures.