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Chapter 10 Ethics, corporate governance and internal controls 10/11

Key points

The main ideas covered by this chapter can be summarised as follows:
Ethical standards
• The CII’s Code of Ethics is concerned with attitudes and behaviour.
• It incorporates five central principles and key questions to ask.
‘Fit and proper’ requirements
• It is necessary to set standards on fitness and propriety for significant owners and key functionaries, and for the
assessment of the compliance with these standards, or ‘fit and proper’ testing, by regulators.
• In order to meet fit and proper requirements, a significant owner or a key functionary should have and demonstrate
the necessary qualities that will allow them to perform the duties and carry out the responsibilities of their position
with the insurer.
Internal control system
• Risk management refers to identifying, assessing, measuring, monitoring, controlling and mitigating risks.
• A ‘best practice’ risk management framework involves several key features, such as governance, risk management
policy, risk tolerance statement, risk responsiveness and feedback loop, own risk and solvency assessment,
economic and regulatory capital, and continuity analysis.
• Compliance and audit serve two very important, but different roles in the risk management framework.
• It should be the intention of every company that complaints to not arise. However if they do arise there must be an
effective system in place that complies with regulatory requirements and standards. Reference copy for CII Face to Face Training Chapter

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