Long Term Insurance Act, 1998 (Act No. 52 of 1998)Board NoticesNotice on Governance and Risk Management Framework for Insurers, 2014Part 4 : Risk Management System11. Overall risk management policy |
| (1) | An insurer must develop and regularly review an adequate written overall risk management policy that includes— |
| (a) | a definition and categorisation of all reasonably foreseeable current and emerging material risks (including external and internal business specific, enterprise-wide and individual business unit risks) to which the insurer is exposed, taking into account the nature, scale and complexity of the insurer and its business; |
| (b) | the approach of the insurer to assessing the materiality of the risks referred to in paragraph (a); |
| (c) | the approach relating to the identification, assessment, monitoring, management and reporting of each risk, including assignment of specific risk management responsibilities across the insurer; and |
| (d) | at least, the following distinct component policies: |
| (i) | a fit and proper policy that provides for the matters provided for under section 12; |
| (ii) | a remuneration policy that provides for the matters provided for under section 13; |
| (iii) | an asset-liability management policy that provides for the matters provided for under section 14; |
| (iv) | an investment policy that provides for the matters provided for under section 15; |
| (v) | an underwriting risk management policy that provides for the matters provided for under section 16; |
| (vi) | a reinsurance and other forms of risk transfer policy that provides for the matters provided for under section 17; |
| (vii) | a liquidity risk management policy that provides for the matters provided for under section 18; |
| (viii) | a concentration risk management policy that provides for the matters provided for under section 19; |
| (ix) | an operational risk management policy that provides for the matters provided for under section 20; |
| (x) | an insurance fraud risk management policy that provides for the matters provided for under section 21. |
| (2) | Despite subsection (1)(d), an insurer may combine the component policies referred to in subsection (1)(d) or provide for the component policy in the overall risk management policy if the insurer is of the view that the specific risks referred to in that paragraph do not justify a distinct policy given the nature, scale and complexity of the insurer's business and risks. |