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New Framework for Insurers

Legalbrief Today published an article on 7 January setting out details of the Governance and Risk Management Framework for insurers which come into effect on 1 April 2015.

“…the purpose of the prescribed framework is to ensure the prudent management and oversight of all insurance business and to adequately protect the interests of policyholders. It is to be adopted, implemented and documented by all insurers ‘proportionate to the nature, scale and complexity’ of the business and risks of each institution concerned.”

“…the gazetted document specifies and expands upon a range of issues to be addressed in each insurer-specific framework. At the very least, that framework should: deal with the composition, governance and structure of the board of directors; and include strategies, policies and procedures for identifying, assessing, monitoring, managing, and reporting ‘all reasonably foreseeable current and emerging material risks to which the insurer may be exposed’. The requirements for ‘effective internal controls’ spelled out in the document appear not to be mandatory for all insurers.

“…the gazetted framework was developed in response to provisions in the amended sections 12(1) of the 1998 Long-term and Short-term Insurance Acts. Where practicalities require the progressive application of a specific section of the prescribed framework, the Registrar may exempt one insurer, insurers generally or particular kinds/types of insurers from that section for a specified period subject to certain conditions.”

Please click here to download Board Notice 158 of 2014 which deals with this matter

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