IAIS published an application paper on group corporate governance, along with the resolution of comments on the March 2017 consultation on this topic. The paper provides material for the practical application of existing principles, standards, and guidance on group governance; however, it does not set new standards.
The application paper is intended to create a common understanding among supervisors on how to assess or evaluate the governance frameworks of insurance groups. The paper aims to provide good supervisory practices and examples to address challenges specific to the governance of insurance groups. The paper relies on the main conclusions of the October 2014 IAIS Issues Paper on Group Corporate Governance; Impact on Control Functions, and provides supervisory responses and best supervisory practices for the five main areas in which insurance groups face challenges as identified in the issues paper. These challenges include setting objectives and strategies; allocation of oversight and management responsibilities; policies and processes; risk management and compliance; and Control Functions.
The application paper aims to provide good practices related to group governance relevant to certain Insurance Core Principles (ICPs). These ICPs are on the supervision of the corporate governance framework, Board composition, and the allocation of responsibilities between the Board at the head of the group and Boards at the level of the insurance legal entities (ICP 7); the supervision of the risk management system and the reporting lines between control functions within the insurance group (ICP 8); the allonation of responsibilities between the group-wide supervisor and other involved supervisors (ICP 23); and cooperation and coordination between involved supervisors with regard to groups (ICP 25). The recommendations in this paper are applicable across supervisory approaches among jurisdictions as well as across the spectrum of governance structures.
Keywords: International, Insurance, Group Corporate Governance, ICP, Application Paper, IAIS