Article from the Annual Report of the BaFin. A delegated act of the European Commission contains additional directly applicable stipulations. BaFin had already published many of these requirements in and in order to prepare the undertakings for Solvency II. With the commencement of the new supervisory regime , it revised and updated the published requirements and carried them over into interpretative decisions. BaFin discussed the first draft of the MaGo with representatives of the industry associations in workshops in July and August It then revised the draft and made it available for public consultation until November
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The second pillar of Solvency II lays down the qualitative requirements for the governance systems of primary insurers and reinsurers subject to Solvency II.
The governance system of insurers is regulated by the provisions of sections 23 to 32 of the German Insurance Supervision Act Versicherungsaufsichtsgesetz — VAG of 1 April The Insurance Supervision Act lays down the following requirements for the governance system of insurers:. The Delegated Regulation is directly applicable in all Member States. This does not mean, however, that the requirements for the risk management of undertakings will be reduced, since most of the existing requirements are also based on the provisions of Solvency II.
In addition, there are new requirements for risk management and other parts of the governance system. Starting on 1 January , BaFin will continue its pronouncements on governance and forward-looking own risk assessment, published in preparation for the Solvency II regime, in the form of interpretative decisions, which will be constantly updated.
Although the interpretative decisions only apply to undertakings subject to Solvency II, BaFin also expects all undertakings outside the scope of this regime to at least comply with the existing requirements.
Based on the experience gained in , BaFin will examine if specific guidance is needed for undertakings that are not subject to Solvency II. It should be noted that the provisions on governance systems apply in part also to small insurers, death benefit funds, Pensionskassen and Pensionsfonds see sections 23 ff.
It helps us to continuously improve the website and to keep it up to date. Please use our contact form if you have any questions regarding specific issues. For any disclosures about actual or suspected violations of supervisory provisions, please address to our contact point for whistleblowers. The responsible handling of financial products in manufacturing and distribution is designed to protect clients.
What are the requirements that credit institutions have to meet if they wish to apply for authorisation to conduct banking business pursuant to sections 32 and 33 of the German Banking Act Kreditwesengesetz — KWG in conjunction with section 14 of the German Reports Regulation Anzeigenverordnung — AnzV? To answer this question, BaFin has now published a guidance notice , in particular in view of ….
The development and promotion of an appropriate risk culture is a primary task of the management of any company.
Translated by the Deutsche Bundesbank. This translation is not official; the only authentic text is the German one as published in the Federal Law Gazette Bundesgesetzblatt. All documents. Tools Switch to article "Governance" in language De utsch. Stand: updated on The Insurance Supervision Act lays down the following requirements for the governance system of insurers: Section 23 of the VAG Article 41 of the S II Framework Directive requires, for instance, an adequate transparent organisational structure with a clear allocation and appropriate segregation of responsibilities and an effective system for ensuring the transmission of information.
The governance system must be effective and adequate and is to be subject to regular review. Undertakings must have written policies in place, including in relation to risk management. There are also requirements relating to the steps undertakings must take in order to ensure continuity and regularity in the performance of their activities.
Section 24 of the VAG Article 42 of the S II Framework Directive stipulates the fit and proper requirements for persons who effectively run the undertaking or have other key tasks. The qualification requirements apply to members of the management board or other persons appointed to represent the undertaking , members of the supervisory board and persons who are responsible for other key tasks such as, in particular, the four mandatory key functions.
This includes not only the person who exercises the key function but also the staff who deal with the respective tasks. The risk management system includes, among other things, strategies, processes and reporting procedures.
The independent risk management function is designed to facilitate the implementation of the risk management system and has additional tasks in undertakings using an internal model. Section 27 of the VAG Article 45 of the S II Framework Directive relates to the own risk and solvency assessment ORSA , which is used, for example, to assess an undertaking's overall solvency needs, taking into account its specific risk profile. The internal control system must at least include administrative and accounting procedures, an internal control framework, appropriate internal reporting arrangements at all levels of the undertaking and a compliance function, which monitors compliance with the requirements.
It advises the management board or other persons appointed to represent the undertaking on compliance issues, assesses the effects of any changes in the legal environment on the undertaking and identifies and assesses the risks associated with failure to comply with the legal requirements compliance risk.
The internal audit function includes, for instance, an evaluation of the adequacy and effectiveness of the internal control system and other elements of the system of governance. Section 31 of the VAG Article 48 of the S II Framework Directive provides for an actuarial function, which, among other things, coordinates the calculation of technical provisions.
In the event of outsourcing, undertakings always remain responsible for complying with the requirements, even in cases where the outsourced functions or activities are not important. Did you find this article helpful? We appreciate your feedback. Comment max. Publications on this topic Format Article Erscheinung: from Format News Erscheinung: from Format Article Erscheinung: from Format Legislation Erscheinung: from
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The core requirement is the establishment of an information security management system ISMS in order to protect the operating against cyber-attacks. A revised version of security requirements was last announced in and was set up for public consultation until February The amendments also incorporated the experience acquired by the BaFin and the Deutsche Bundesbank in their day-to-day supervisory activities and in inspections. For example, the BaFin increased the requirements for data aggregation.
MaRisk VA specifies the design of the risk management in German insurance companies and covers qualitative standards for the risk management processes and methods to be introduced. In addition, an organizational framework must be implemented that focuses on structural and process organization. An Internal Control System must be established and verified on an ongoing basis. The implemented controls for ensuring the operational capability of the risk management system are a key success factor. MaRisk VA requires performance tests of the implemented controls at least once a year in order to ensure that control weaknesses are evaluated and corresponding measures taken.
The second pillar of Solvency II lays down the qualitative requirements for the governance systems of primary insurers and reinsurers subject to Solvency II. The governance system of insurers is regulated by the provisions of sections 23 to 32 of the German Insurance Supervision Act Versicherungsaufsichtsgesetz — VAG of 1 April The Insurance Supervision Act lays down the following requirements for the governance system of insurers:. The Delegated Regulation is directly applicable in all Member States.
BaFin is working together with the European Central Bank and the European Supervisory Authorities to monitor the coronavirus situation: everything of importance on this topic. Due to the special situation surrounding COVID the novel coronavirus , BaFin has been receiving numerous queries from associations and institutions, many of which allude to the same topics. In the following, BaFin consolidates and responds to these queries. Any questions in this regard should be directed to the securities supervision division responsible for your institution. This is a living document that is being updated and supplemented on an ongoing basis.