On December 23 2013 the Central Bank published a revised Corporate Governance Code for Credit Institutions and Insurance Undertakings. The revised code comes into effect on January 1 2015 and will apply to all credit institutions and insurance undertakings (including reinsurers, but excluding captives) licenced or authorised by the Central Bank. It incorporates feedback received from key stakeholders following the Central Bank's recent public consultation – CP 69. The code imposes minimum statutory requirements on how credit institutions and (re)insurance undertakings licensed or authorised by the Central Bank should organise the governance of their institutions.
The code imposes some additional requirements on high-impact institutions, so as to ensure that appropriate and robust corporate governance frameworks are in place and implemented to reflect the risk and nature of those institutions.
Some of the main changes affecting (re)insurance undertakings introduced by the revised code are as follows:
- (Re)insurance undertakings will be required to appoint a chief risk officer (CRO), and a new section has been introduced outlining the role and responsibilities of the CRO. The risk committee will be made up of a majority of non-executive or independent non-executive directors, one of whom must be the chairman of the committee.
- Risk and audit committees are required to have a minimum of three members.
- (Re)insurance undertakings will be required to introduce a diversity policy for board membership."The chairman can now hold the role of chairman in other (re)insurance undertakings within the group, subject to prior approval by the Central Bank.
- (Re)insurance undertakings are reminded that they will continue to be subject to the requirements of the existing code until January 1 2015. In addition to the revised code, the Central Bank has published the submissions received to the public consultation, as well as the feedback statement document which can be found on the Central Bank's website.
This article first appeared in the International Law Office Insurance and Reinsurance newsletter, 8 April 2014
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