Answers to the European Commission on the ... - Eiopa - Europa
Answers to the European Commission on the ... - Eiopa - Europa
Answers to the European Commission on the ... - Eiopa - Europa
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- Governance<br />
corrective and ultimate measures <strong>on</strong>ce <str<strong>on</strong>g>the</str<strong>on</strong>g> preventive and corrective<br />
measures have been performed, if <str<strong>on</strong>g>the</str<strong>on</strong>g> interests of policyholders are<br />
still compromised.<br />
14.39 Supervisory authorities should have effective powers <str<strong>on</strong>g>to</str<strong>on</strong>g> address<br />
management problems, including limiting <str<strong>on</strong>g>the</str<strong>on</strong>g> power of c<strong>on</strong>trolling<br />
owners, Board of Direc<str<strong>on</strong>g>to</str<strong>on</strong>g>rs, and Senior Management, demanding <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />
replacement or having <str<strong>on</strong>g>the</str<strong>on</strong>g>ir powers restricted (see fit and proper<br />
powers), in situati<strong>on</strong>s where <str<strong>on</strong>g>the</str<strong>on</strong>g> governance of an undertaking is<br />
c<strong>on</strong>sidered <str<strong>on</strong>g>to</str<strong>on</strong>g> be dem<strong>on</strong>strably unsatisfac<str<strong>on</strong>g>to</str<strong>on</strong>g>ry for <str<strong>on</strong>g>the</str<strong>on</strong>g> prudent running<br />
of <str<strong>on</strong>g>the</str<strong>on</strong>g> undertaking, regardless of <str<strong>on</strong>g>the</str<strong>on</strong>g> legal form.<br />
14.40 Supervisory authorities should have <str<strong>on</strong>g>the</str<strong>on</strong>g> power <str<strong>on</strong>g>to</str<strong>on</strong>g> request that <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
governance system, and <str<strong>on</strong>g>the</str<strong>on</strong>g> policies, strategies and procedures<br />
relating <str<strong>on</strong>g>to</str<strong>on</strong>g> internal c<strong>on</strong>trol and risk management systems be improved<br />
and streng<str<strong>on</strong>g>the</str<strong>on</strong>g>ned.<br />
14.41 In additi<strong>on</strong> <str<strong>on</strong>g>to</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> powers described above, supervisory authorities<br />
should be able <str<strong>on</strong>g>to</str<strong>on</strong>g> simultaneously demand an increase in <str<strong>on</strong>g>the</str<strong>on</strong>g> solvency<br />
capital requirement if it c<strong>on</strong>cludes that <str<strong>on</strong>g>the</str<strong>on</strong>g> existing governance<br />
system, and <str<strong>on</strong>g>the</str<strong>on</strong>g> policies, strategies and procedures relating <str<strong>on</strong>g>to</str<strong>on</strong>g> internal<br />
c<strong>on</strong>trol and risk management increase <str<strong>on</strong>g>the</str<strong>on</strong>g> risk profile of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
undertaking.<br />
14.42 With regard <str<strong>on</strong>g>to</str<strong>on</strong>g> fit and proper issues, supervisory authorities should<br />
have <str<strong>on</strong>g>the</str<strong>on</strong>g> power <str<strong>on</strong>g>to</str<strong>on</strong>g>:<br />
• prevent <str<strong>on</strong>g>the</str<strong>on</strong>g> appointment by <str<strong>on</strong>g>the</str<strong>on</strong>g> insurer of a particular individual<br />
<str<strong>on</strong>g>to</str<strong>on</strong>g> a key functi<strong>on</strong>;<br />
• suspend an individual from a key positi<strong>on</strong>, or withdraw <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
approval of an individual <str<strong>on</strong>g>to</str<strong>on</strong>g> hold key positi<strong>on</strong>s, if c<strong>on</strong>cluded not<br />
fit or proper by <str<strong>on</strong>g>the</str<strong>on</strong>g> supervisor, ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r directly or by instructing<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> insurer <str<strong>on</strong>g>to</str<strong>on</strong>g> take <str<strong>on</strong>g>the</str<strong>on</strong>g>se measures; 118<br />
• require <str<strong>on</strong>g>the</str<strong>on</strong>g> insurer <str<strong>on</strong>g>to</str<strong>on</strong>g> appoint such individuals as are necessary<br />
<str<strong>on</strong>g>to</str<strong>on</strong>g> streng<str<strong>on</strong>g>the</str<strong>on</strong>g>n key functi<strong>on</strong>s in order <str<strong>on</strong>g>to</str<strong>on</strong>g> ensure <str<strong>on</strong>g>the</str<strong>on</strong>g> sound and<br />
proper management and c<strong>on</strong>trol at <str<strong>on</strong>g>the</str<strong>on</strong>g> insurer;<br />
• require <str<strong>on</strong>g>the</str<strong>on</strong>g> insurer <str<strong>on</strong>g>to</str<strong>on</strong>g> engage a pers<strong>on</strong> with appropriate<br />
expertise and skills, nominated by <str<strong>on</strong>g>the</str<strong>on</strong>g> supervisor, <str<strong>on</strong>g>to</str<strong>on</strong>g> investigate<br />
any aspect of <str<strong>on</strong>g>the</str<strong>on</strong>g> insurer’s affairs that may be of c<strong>on</strong>cern <str<strong>on</strong>g>to</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />
supervisory authority and <str<strong>on</strong>g>to</str<strong>on</strong>g> prepare a corresp<strong>on</strong>ding report for<br />
<str<strong>on</strong>g>the</str<strong>on</strong>g> supervisory authority. The insurer is <str<strong>on</strong>g>to</str<strong>on</strong>g> bear <str<strong>on</strong>g>the</str<strong>on</strong>g> cost of that<br />
investigati<strong>on</strong> and report;<br />
• withdraw <str<strong>on</strong>g>the</str<strong>on</strong>g> license, especially in <str<strong>on</strong>g>the</str<strong>on</strong>g> case of a major breach<br />
(ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r in terms of <str<strong>on</strong>g>the</str<strong>on</strong>g> degree of <str<strong>on</strong>g>the</str<strong>on</strong>g> breach or of <str<strong>on</strong>g>the</str<strong>on</strong>g> number of<br />
key functi<strong>on</strong>aries involved) of fit and proper requirements.<br />
118 A minority of CEIOPS’ members do not wish <str<strong>on</strong>g>to</str<strong>on</strong>g> see this requirement in <str<strong>on</strong>g>the</str<strong>on</strong>g> future framework.<br />
166