A Company must have a Corporate Governance framework that offers comprehensive management and oversight of the Company's business in a manner that protects the rights of policyholders.
2.
The Corporate Governance framework must contain the following components, at a minimum:
a.
Policies that define and support the Company's strategy and objectives.
b.
Definition of the roles and responsibilities of persons accountable for management and oversight.
c.
Description on the manner in which decisions are taken.
d.
Sound compensation practices.
e.
Requirements for active engagement and communication with the Central Bank relating to the management and oversight of the Company.
f.
Corrective actions for non-compliance or weak oversight, controls or management.
g.
An appropriate corporate culture that promotes integrity, transparency and accountability, which leads to achieving the Company's long-term objectives and the protection of the rights of policyholders and other stakeholders.
3.
A Company must establish a transparent organisational structure, at the entity level and Group-wide level if applicable, that supports its objectives, including executing the key responsibilities of the Board and specifying any delegations and the key responsibilities and authorities of its committees, Senior Management and key persons in Control Functions. In this context key persons in Control Functions refers to persons responsible for heading control functions. Groups must ensure that their Corporate Governance frameworks are appropriate to their structure, business and risks.
4.
The Board and Senior Management must understand the Group organisational structures, both at the level of the legal entity and business line, and the origin and responsibility for risks posed.
5.
The Board is responsible for establishing and operating a clear governance framework for the Group, which must be appropriate to the structure, business and risks of the parent Company and all its related entities, including subsidiaries, Affiliates and international branches.
6.
When setting up a Group, the following factors must be taken into consideration, at both the Group and entity levels:
a.
Clear division of roles and responsibilities
b.
Legal obligations, governance and risks associated at each level
c.
Effective coordination and communication.
7.
The Board must exercise appropriate/due oversight over the Group while respecting the independent legal and governance responsibilities that might apply to the individual entities.