Page 157 - CFPA-SCR-Award in General Insurance W01_2018-19_Neat

Chapter 10 Ethics, corporate governance and internal controls 10/5

B2 General requirements
In order to meet fit and proper requirements, a significant owner or a key functionary should have and
demonstrate the necessary qualities that allow them to perform the duties and carry out the
responsibilities of their position.
These qualities relate at a minimum to:

Significant owners • the integrity demonstrated in personal behaviour and business conduct;
• soundness of judgment; and
• financial soundness.
Key functionaries • the integrity demonstrated in personal behaviour and business conduct;
• soundness of judgment; and
• a sufficient degree of knowledge, experience and professional qualifications.

Regulators require that significant owners and key functionaries meet the ‘fit and proper’ requirements
on a continuous basis.

B3 Requirements on integrity

The conduct and actions of the individual who is subject to the fit and proper requirements are such that
their integrity is beyond reasonable doubt. The principal indicators of an individual’s lack of integrity
include criminal, financial and supervisory aspects.

B3A Criminal indicators
As a matter of principle, the individual should not have a criminal record, i.e. have been convicted of
causing members of the public financial loss due to dishonesty, misappropriation of assets,
embezzlement or any other fraud.

B3B Financial indicators
Financial indicators provide information on possible financial misconduct, improper conduct of financial
accounting or negligence or bad judgment in decision-making. Indicators could be:
• financial difficulties leading to legal proceedings;
• discrepancy between financial commitments and income and funds;
• personal bankruptcy or financial difficulties; or
• insolvency of an institution to which the individual is/was a significant owner or key functionary.
B3C Supervisory indicators

Supervisory indicators provide information collected by regulators in the performance of their
supervisory duties. These regulators could also be authorities with supervisory responsibility in sectors
other than insurance. Indicators could be:
• withholding information from public authorities;
• submission of incorrect financial or other statements
• prior refusal of regulatory approval; and/or
• other corrective actions/interventions by a public authority.

B3D Other indicators

Other indicators may provide information relevant to the fitness and propriety of the individual. To be
considered ‘fit and proper’, an individual should not have:

• a poor disciplinary record; Chapter
• been dismissed by a previous employer for disciplinary reasons; or 10
• done anything that has gone against a professional code of conduct such as the CII’s Code of Conduct.