Featured Product

    BaFin Publishes Business Organization Requirements for Small Insurers

    March 06, 2020

    BaFin publishes a circular on minimum requirements for the business organization of small insurance companies. It addresses small insurance companies in accordance with Section 211 of the Insurance Supervision Act and explains how they should structure the important areas of their business organization in accordance with section 23 of the Insurance Supervision Act. Considering the principle of proportionality, the circular provides for various simplifications for small insurance companies compared to Solvency II companies. The circular will come into force on April 01, 2020.

    The circular provides information on the interpretation of the regulations on business organization in the Insurance Supervision Act. It makes these regulations binding for BaFin and ensures consistent application to all small insurance companies. The circular is based on the approach that the managers of a small insurance company have overall responsibility for the proper and effective business organization of the company.

    In the circular, BaFin summarizes the requirements for an appropriate risk culture and highlights that it is important that the risk culture is lived, communicated within the company, and taken into account when building risks. These are important prerequisites for an effective and orderly business organization, which most companies already take into account. BaFin also expects Solvency II insurance companies to have an appropriate risk culture. In the course of the revision of the MaGo circular (02/2017), which has been planned after completion of the Solvency II review, the corresponding section will therefore also be included in this circular, which applies to Solvency II companies.

    BaFin expects companies that fall within the scope of this circular to deal with the requirements of the circular. They are required to check whether an adjustment to their business organization is necessary and, if necessary, how this adjustment should be carried out in a manner that is appropriate to the risk profile. Since section 23 of the Insurance Supervision Act has been in force since 2016 and individual companies may have previously assumed a different interpretation, flat-rate transition periods are not appropriate. BaFin will clarify this in individual cases in dialog with the respective company.

     

    Related Links (in German)

    Effective Date: April 01, 2020

    Keywords: Europe, Germany, Insurance, Proportionality, Small Insurance Companies, Operational Risk, Insurance Supervision Act, Governance, Risk Culture, BaFin

    Related Articles
    News

    UK Authorities Consult on Implementation of Basel 3.1 Standards

    The UK authorities have published consultations with respect to the Basel requirements for banks. The Prudential Regulation Authority (PRA) published the consultation paper CP16/22 on rules for the implementation of Basel 3.1 standards.

    November 30, 2022 WebPage Regulatory News
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    FSB and NGFS Publish Initial Findings from Climate Scenario Analyses

    The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.

    November 15, 2022 WebPage Regulatory News
    News

    FSB Issues Reports on NBFI and Liquidity in Government Bonds

    The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.

    November 14, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    EU Finalizes Rules Under Crowdfunding Service Providers Regulation

    The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.

    November 08, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8597