ICP 5 Suitability of Persons

The supervisor requires Board Members, Senior Management, Key Persons in Control Functions and Significant Owners of an insurer to be and remain suitable to fulfil their respective roles.


5.1

Legislation identifies which persons are required to meet suitability requirements. The legislation includes at least Board Members, Senior Management, Key Persons in Control Functions and Significant Owners.


5.2
The supervisor requires that in order to be suitable to fulfil their roles:
  • Board Members (individually and collectively), Senior Management and Key Persons in Control Functions possess competence and integrity; and
  • Significant Owners possess the necessary financial soundness and integrity.


Suitability requirements for Board Members, Senior Management and Key Persons in Control Functions


5.2.1    

Competence is demonstrated generally through the level of an individual’s professional or formal qualifications and knowledge, skills and pertinent experience within the insurance and financial industries or other businesses. Competence also includes having the appropriate level of commitment to perform the role. Refer to ICP 7 (Corporate Governance) with regard to competence and commitment and to ICP 8 (Risk Management and Internal Controls) with regard to control functions.

5.2.2    

Integrity is demonstrated generally through character, personal behaviour and business conduct.

5.2.3    

The supervisor should require the insurer to take the necessary measures to ensure that these requirements are met by setting high internal standards of ethics and integrity, promoting sound corporate governance and requiring that these individuals have pertinent experience, and maintain a sufficient degree of knowledge and decision making ability.

5.2.4    

To ensure an appropriate level of suitability, Board Members, Senior Management and Key Persons in Control Functions should acquire, maintain and enhance their knowledge and skills to fulfil their roles, for example, by participating in induction and ongoing training on relevant issues. Sufficient time, budget and other resources should be dedicated for this purpose, including external expertise drawn upon as needed.

More extensive efforts should be made to train those with more limited financial, regulatory or risk-related experience.

CF 5.2.a    
The group-wide supervisor requires the IAIG Board Members (individually and collectively), Senior Management, and Key Persons in Control Functions, to have the necessary competence to fulfil their role, taking into account the complexity and international nature of the IAIG, any specific features of the jurisdictions where the IAIG operates, and the risks to which it is exposed.

CF 5.2.a.1    
Appropriate competencies include, for example, knowledge of and experience with international business and processes, as well as with different business models.


Suitability requirements for Significant Owners


5.2.5    
The necessary qualities of a Significant Owner relate at least to:
  • financial soundness demonstrated by sources of financing/funding and future access to capital; and
  • integrity demonstrated in personal or corporate behaviour.

5.3

The supervisor requires the insurer to demonstrate initially and on an ongoing basis, the suitability of Board Members, Senior Management, Key Persons in Control Functions and Significant Owners. The suitability requirements and the extent of review required by the supervisor depend on the person’s role.


5.4

The supervisor requires notification by insurers of any changes in Board Members, Senior Management, Key persons in Control Functions and Significant Owners, and of any circumstances that may materially adversely affect the suitability of its Board Members, Senior Management, Key Persons in Control Functions and Significant Owners.


5.5

The supervisor takes appropriate action to rectify the situation when Board Members, Senior Management and Key Persons in Control Functions or Significant Owners no longer meet suitability requirements.


5.6

The supervisor exchanges information with other authorities inside and outside its jurisdiction where necessary to check the suitability of Board Members, Senior Management, Key Persons in Control Functions and Significant Owners of an insurer.