Hostname: page-component-78c5997874-4rdpn Total loading time: 0 Render date: 2024-11-10T19:56:06.376Z Has data issue: false hasContentIssue false
  • English
  • Français

Governance and Risk Management in United Kingdom Insurance Companies

Published online by Cambridge University Press:  12 March 2012

S. P. Deighton ,
R. C. Dix ,
J. R. Graham  and
J. M. E. Skinner
Get access Rights & Permissions [Opens in a new window]

Abstract

For some while there has been a growing awareness from both internal and external stakeholders that the governance and risk management in United Kingdom (U.K.) insurance companies needed to be enhanced. The proposed European Union Solvency II Directive makes this very explicit and the current economic turmoil has put a much stronger emphasis on the whole process: it is being seen as the right thing to do, rather than simply a regulatory requirement. In this paper, we set out the background to and recent history of governance for U.K. insurance companies, and consider how enterprise risk management can bring together the various control frameworks needed to support that governance. Whilst no two companies are the same, and hence the solutions to these issues will vary, there are several common themes linked to successful implementation. Similarly, various barriers to success are identified, together with solutions to resolve them.

Keywords

Corporate GovernanceRisk ManagementEnterprise Risk Management (ERM)Solvency IITurnbullCombined CodeChief Risk OfficerInternal ControlsListing RulesSarbanes-OxleyFinancial Reporting Council (FRC)Rating AgenciesInternal AuditStrategy
Type
Sessional meetings: papers and abstracts of discussions
Information
British Actuarial Journal , Volume 15 , Issue 3 , September 2009 , pp. 503 - 556
Copyright
Copyright © Institute and Faculty of Actuaries 2009

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

A.M. Best Company. Risk Management and Rating Process for Insurance Companies. Available at: http://www.ambest.com/ratings/process/ratingprocess.aspGoogle Scholar
Cadbury, A. (Chairman) (1992). Report of the Committee on the Financial Aspects of Corporate Governance. Available at: www.ecgi.org/codes/documents/cadbury.pdfGoogle Scholar
CFO Forum (2008). Market Consistent Embedded Values (MCEV): Principles and Guidance.Google Scholar
CEIOPS Quantitative Impact Studies. Available at: http://www.ceiops.eu/content/view/118/124/Google Scholar
Committee of Sponsoring Organisations of the Treadway Commission (2004). Enterprise Risk Management: Integrated Framework.Google Scholar
The Companies Act (2006). Available at: http://www.opsi.gov.uk/acts/acts2006/pdf/ukpga_20060046_en.pdfGoogle Scholar
The Company Directors Disqualification Act (1986). Available at: www.legislation.gov.uk/ukpga/1986/46/contentsGoogle Scholar
Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance. Available at: http://eur-lex.europa.eu/LexUriServ.do?uri=OJ:L:2002:077:0022:en.pdfGoogle Scholar
Directive 2002/13/EC of the European Parliament and of the Council of 5 March 2002. Available at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2002:0077:0017:0022:en.pdfGoogle Scholar
European Commission (2008). Directive of the European Parliament and of the Council on the taking up and pursuit of the business of insurance and reinsurance (“solvency II”). Available at: http://ec.europa.eu/internal_market/insurance/docs/solvency/proposal_en.pdfGoogle Scholar
The Financial Reporting Council (2005). Internal Control: Guidance for Directors on the Combined Code. http://www.frc.org.uk/documents/pagemanager/frc/Revised%20Turnbull%20Guidance%20October%202005.pdfGoogle Scholar
The Financial Reporting Council (2008). The Combined Code on Corporate Governance. http://www.frc.org.uk/documents/pagemanager/frc/Combined_Code_June_2008/Combined%20Code%20Web%20Optimized%20June%202008(2).pdfGoogle Scholar
The Financial Services and Markets Act (2000). Available at: www.legislation.gov.uk/ukpga/2000/8/contentsGoogle Scholar
The Financial Services Authority (FSA) Handbook. Available at: http://fsahandbook.info/FSA/index.jspGoogle Scholar
The Financial Services Authority (2008). Discussion Paper: Insurance Risk Management: The Path to Solvency II. Available at: http://www.fsa.gov.uk/pages/Library/Policy/DP/2008/08_04.shtmlGoogle Scholar
Higgs, (2003). Review of the role and effectiveness of non-executive directors. Available at: www.berr.gov.uk/files/file23012.pdfGoogle Scholar
The International Accounting Standards Board (2008). IFRS 4. Available at: http://www.iasb.org/IFRS+Summaries/IFRS+and+IAS+Summaries+English+2008/IFRS+andIAS+Summaries+English+htmGoogle Scholar
IT Governance Institute. Control Objectives for Information and Related Technology (COBIT). Available at: www.itgi.orgGoogle Scholar
Public Company Accounting Reform and Investor Protection Act (2002). Available at: http://thomas.loc.gov/cgi-bin/query/z?c107:h5070:Google Scholar
Smith, (2005) Guidance on Audit Committees available at: http://www.frc.org.uk/documents/pagemanager/frc/Smith_Guidance/Smith%20Report%202005.pdfGoogle Scholar
Standard & Poor's (2006). Refining the Focus of Insurer Enterprise Risk Management Criteria. http://www2.standardandpoors.com (this one is not freely available).Google Scholar
Standard & Poor's (2008). Enterprise Risk Management: ERM Development in the Insurance Sector could gain strength in 2008. http://www2.standardandpoors.com/portal/site/sp/en/us/page.article/2,1,6,4,1204834496637.htmlGoogle Scholar
Turnbull, N. (Chairman) (1999). Internal Control: Guidance for Directors on the Combined Code. London Stock Exchange.Google Scholar
Turner, Lord, Chairman FSA (2009). Speech made at The Economist's Inaugural City Lecture 21 January 2009. Available at: http://www.fsa.gov.uk/pages/Library/Communication/Speeches/2009/0121_at.shtmlGoogle Scholar
Tyson, (2003) Report on the Recruitment and Development of Non-executive Directors. Available at: http://www.london.edu/facultyandresearch/research/docs/TysonReport.pdfGoogle Scholar