Table. Recommended Action Plan to Improve Observance of IAIS Insurance Core Principles
Conditions for effective insurance supervision i.e., CP 1 Suitability of persons i.e., CP 7
Internal control i.e., CP10
Risk assessment and management i.e., CP 18
Expand the mandate of insurance companies’ external auditors to provide information to the NBS, in line with the requirements placed on external auditors of banks. Provide the NBS with strengthened powers to take actions against new owners of existing insurance businesses, so as to ensure fitness and propriety including the power to require that owners dispose of their interests. Introduce through legislation a stronger statutory role for actuaries and auditors in the supervisory process including legal requirements for information disclosure to the supervisor by actuaries and internal auditors. Strengthen requirements covering risk assessments by insurance companies; starting in 2008, all insurers will be required to calculate a wider selection of risk ratios.
Investments i.e., CP 21
Derivatives and similar commitments i.e., CP 22
Capital adequacy and solvency i.e., CP 23
Consumer protection i.e., CP 25
Strengthen expertise within NBS regarding assessment of market, credit, matching and operational risks. Cooperation with the investment experts within the NBS can enhance the future quality of supervision in a manner consistent with the philosophy of Solvency II. Require insurance companies to adopt and clearly disclose comprehensive policies on the use of derivatives and to have appropriate risk management systems and internal controls in place (investments in derivatives by Slovak insurance companies have been modest to date, so that this recommendation is not currently critical). Consider establishing and communicating a solvency control level in excess of the minimum solvency margin, particularly if it appears that the implementation of Solvency II will need to be delayed. Allocate sufficient resources to enable the NBS to adequately supervise the market conduct of intermediaries and agents that sell insurance products.
Insure that insurance companies, intermediaries and consumers are all fully aware of the legal conditions concerning market conduct and disclosure requirements for insurance products.