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Member, Beacon International Group, Ltd.
BERN, Switzerland Swiss insurers must adhere to new requirements of corporate governance, risk management and internal controls under a directive recently enacted by the Federal Office of Private Insurance.
The directive calls for insurers to have in place by December 31 a program that meets minimum standards developed by the insurance office. The directive is part of the implementation of Switzerland's revised Insurance Supervision Act.
The FOPI lists several principles of corporate governance that must be met, including development of clear documentation on governance procedures, instructions requiring employees to act in an ethical manner and creation of a compliance function if the company is sizeable enough to warrant such a position. Requirements also spell out responsibilities of boards of directors and executive boards.
Among the systems that insurers are required to have in place are those that identify and measure risks, define risk strategies and account for risk tolerance and appetite.
Internal controls must ensure that risks are properly recognized and can be monitored.
The FOPI will be using, among other tools, a newly developed monitoring process that that allows a qualitative examination of the insurers' systems.