Q&As

What are the corporate governance requirements of Solvency II that would need to be considered when determining any corporate governance structure?

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Published on LexisPSL on 27/06/2018

The following Financial Services Q&A provides comprehensive and up to date legal information covering:

  • What are the corporate governance requirements of Solvency II that would need to be considered when determining any corporate governance structure?
  • Solvency II: Corporate governance requirements
  • UK implementation of Solvency II
  • Corporate governance
  • Senior Insurance Managers Regime and Approved Persons Regime
  • Outsourcing

Solvency II: Corporate governance requirements

An overview of the corporate governance requirements of Solvency II is set out in Practice Notes: Solvency II—pillar 2: governance, risk management and supervisory review and Prudential requirements for UK insurers—Pillar 2 and Pillar 3 requirements. These requirements include:

  1. a requirement for the administrative, management or supervisory body of an undertaking to have ultimate responsibility for its compliance with the Solvency II regime (Article 40 of Solvency II)

  2. general governance requirements (Article 41 of Solvency II), including:

    1. an effective system of governance which provides for sound and prudent management of the business, proportionate to the nature, scale and complexity of the operations of the undertaking and subject to regular internal review, and including an adequate transparent organisational structure with a clear allocation and appropriate segregation of responsibilities and an effective system for ensuring the transmission of information

    2. written policies in relation to at least risk management, internal control, internal audit and, where relevant, outsourcing, subject to prior approval by the administrative, management or supervisory body, reviewed at least annually, and adapted in view of any significant change

    3. appropriate and proportionate systems, resources and procedures to ensure continuity and regularity in the performance of an undertaking’s activities, including contingency plans

  3. fit and proper requirements for persons who effectively run the undertaking or have other key functions (Article 42 of Solvency II)

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