The Insurance Compliance Function — Overview of International Standards
The attached provides a practical overview of IAIS Core Principle (ICP) #8 with respect to the duties, management, and oversight of an insurance company’s Compliance Function.
International Association of Insurance Supervisors (IAIS) Insurance Core Principles (ICP) #8 covers standards for Risk Management and Internal Control including standards for the insurance company’s compliance function. Specifically, ICP requires the insurer to maintain:
[A]n effective compliance function capable of assisting the insurer to i) meet its legal, regulatory and supervisory obligations and ii) promote and sustain a compliance culture, including through the monitoring of related internal policies.
The attached presentation details the application of ICP #8 to:
- The scope of the insurance compliance function;
- Management and board responsibilities with respect to the compliance function;
- Requirements for the head of the compliance function;
- Organization of the compliance function;
- The steps in the compliance system;
- Compliance training and awareness;
- The compliance function’s role in internal investigations; and
- Reporting by the compliance function to management and board.
The IAIS is an association of insurance supervisors and regulators from more than 200 jurisdictions. U.S. members of the IAIS are the National Association of Insurance Commissioners (NAIC), Federal Insurance Officefeder (FIO) and the Federal Reserve Board (FRB).
The IAIS serves as the international standard-setting body responsible for principles, standards and other supporting material for the supervision and regulation of the insurance sector. The ICP (recently combined with the Common Framework for the Supervision of Internationally Active Insurance Groups) is its most significant set of standards.
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