Governance rules in the insurance and reinsurance industry were updated recently, with circular 22/15 published by the Commissariat aux assurances on 26th July. To help directors with the required fresh thinking and analysis, ILA is organising an information and discussion forum, and is updating its guide to governance rules and best practices. Jean-Michel Pacaud, chair of the ILA Insurance Committee explained.

“No doubt that the long-awaited circular22/15 on governance in the insurance and reinsurance sector is currently being analysed by the industry, and the ILA Insurance Committee is working to help these reflections,” said Jean-Michel. This topic will be one of the key focal points of the ILA Forum for Directors of (re)insurance Undertakings, to be held on 27 October. This will be the second such event organised by ILA specifically for this sector.

Governance focus for Forum
While exploring and discussing this new circular will be of prime importance, the Forum will also probe other important topics from a governance perspective, including the latest thinking on the upcoming revision of the Solvency II Directive, the implications of the IFRS 17 accounting standard, facing the ESG challenge, and topical subjects such as the wider impact of the war in Ukraine. “By focusing on the technicalities and practical application of rules and regulatory guidelines, the forum will equip participants with the tools and knowledge they need to face the current challenging environment,” Jean-Michel said.

Input from the regulatory and governance perspective will also be a feature of the Forum, alongside specialist analysis from governance professionals. As well as the presentations and panel discussions, the Forum will also offer high quality networking opportunities. Both ILA members and non-members are welcome. Find more information and the registration form here.

Revised guide in the works
As for the “Practical Guide to the Duties and Responsibilities of Directors of Luxembourg Insurance Companies”, this will be published by the end of the year. This will be an update of the previous publication which appeared in 2015, and will feature a summary of the latest regulatory requirements and global industry best practices.

The insurance/reinsurance industry has its own regulatory and business specifics, and boards in this sector need to be aligned with the latest overall governance trends seen across the financial industry and beyond. Jean-Michel noted that the Insurance Committee has been working on an update to this guide for some time. Yet this work was put on hold when they heard of the plans for a new circular. Hence it will take a few more weeks before this definitive guide can be finalised after discussions with all key stakeholders.

Even though Jean-Michel notes that the circular does not represent a revolution, “it does bring greater clarification and details around principles which were already part of the December 2015 insurance law. This law profoundly reframed the supervisory framework of the insurance and reinsurance industry by incorporating the provisions included in the Solvency II directive. The circular also builds on the provisions of the law of July 2016 on the audit profession regarding the composition and functioning of the audit committee: a specialised board committee.” It will be important for directors to be aligned with these details to ensure that their companies satisfy regulatory and market requirements on governance.

Year-end also presents opportunities for ILA members to become more involved with the work of the institute’s committees. Any directors interested in helping the Insurance Committee with its work should contact Karen Wauters at k.wauters@ila.lu.