On August 6 2012 the insurance regulator, ISVAP, published the outline of Regulation 50/2012 amending and supplementing Regulation 20/2008 regarding internal audits, risk management, compliance and outsourcing of insurers' operations.
The purpose of the amendments is to adjust certain provisions of Regulation 20 to accord with the International Association of Insurance Supervisors Insurance Core Principle 7 regarding the principles of corporate governance.
Specifically, the amendments provide for:
- Further tasks for the administrative body, especially with regard to delegation, training and self-assessment, in order to improve – within the context of the administrative body's strategic and organisational duties pursuant to Article 2381 of the Civil Code – the efficiency of the managerial process, as well as the assessment of the suitability of a company's organisational setup; and
The drafting of a regular information report to ISVAP on aspects of corporate governance (similar to what has already been provided for by Article 123bis of the Consolidated Finance Act in the case of listed companies) in order to guarantee greater interaction between the company and the supervisory body, in keeping with the principles established (among other things) by the EU Solvency II Directive. The report will detail:
- the composition and workings of the administrative body and its committees;
- the principles underlying the decisions made;
- the actions taken to monitor directors' interests in company operations for which they must make decisions;
- operations with related parties; and
- general conflicts of interest.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.