NBB published an update of its overarching circular (NBB_2016_31) on governance for the insurance sector. The entry into force of the Companies and Associations Code, the new EIOPA guidelines on cloud outsourcing and remuneration, and other regulatory developments require an update of this circular. NBB_2016_31 sets out the expectations of NBB with regard to governance for the insurance and reinsurance sectors. All changes to the overarching circular on governance come into effect immediately, with the exception that new recommendations on outsourcing and remuneration shall apply from 2021. NBB also published a circular with recommendations on outsourcing to cloud service providers. The circular implements the recommendations of EIOPA.
The main updates to the overarching circular on governance include the following:
- Indication of how to reconcile the new rules of the Companies and Associations Code with prudential governance requirements
- Simplification of the rules on the distribution of tasks between members of the management committee
- Revision of Chapter 7 on outsourcing to reinforce the operational resilience of insurance and reinsurance companies and to assign a specific monitoring responsibility to the compliance and internal audit functions
- Revision of Chapter 8 on remuneration to clarify the prudential expectations to be met by Identified Staff receiving significant variable remuneration, in accordance with the recommendations proposed by EIOPA
- Update of Chapter 10 on IT infrastructure to emphasize cyber security and compliance with the new rules on cloud outsourcing
- Introduction of certain recommendations on sustainable finance
The general rules on outsourcing have been set out in Article 274 of the EU Delegated Regulation 2015/35, which supplements the Solvency II Directive, and in Chapter 7 of the overarching circular on governance (NBB_2016_31). NBB circular on recommendation on outsourcing to cloud service providers should be read in conjunction with Chapter 7 of the overarching circular on governance. These recommendations transpose the guidelines on outsourcing to cloud service providers, as published by EIOPA on February 06, 2020, into Belgian regulations.
- Update to Overarching Circular on Governance (PDF)
- Circular on Recommendations on Outsourcing (PDF)
- Circular NBB_2016_31 (in French)
Effective Date: May 05, 2020/Year 2021
Keywords: Europe, Belgium, Insurance, Governance, Solvency II, Cloud Outsourcing, Sustainable Finance, Operational Risk, Cyber Risk, Remuneration, NBB
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