Chapter IV: Governance system

Insurance and reinsurance undertakings shall have in place a system of governance which ensures the sound and prudent management of their business and which is subject to regular internal review. The system of governance shall be based on a clear segregation of responsibilities and shall include an effective system of reporting. It is proportionate to the nature, scale and complexity of the company’s operations. The governance system includes the following…

Insurance and reinsurance undertakings set up a risk management system. They shall carry out an internal assessment of risks and solvency. They shall have an internal control system. A decree of the Conseil d’Etat shall specify the conditions of application of this article.

Insurance and reinsurance undertakings shall remain fully responsible for compliance with their obligations when outsourcing insurance or reinsurance functions or activities. Insurance and reinsurance undertakings shall refrain from outsourcing significant or critical business activities or functions where such outsourcing could seriously impair the quality of the system of governance of the undertaking concerned, unduly increase operational risk, impair the ability of supervisory authorities to verify compliance with the obligations of…