Article 258
General governance requirements
1.
Insurance and reinsurance undertakings shall fulfil all of the following requirements:
(a)
establish, implement and maintain effective cooperation, internal reporting and communication of information at all relevant levels of the undertaking;
(b)
establish, implement and maintain effective decision making procedures and an organisational structure which clearly specifies reporting lines, allocates functions and responsibilities, and takes into account the nature, scale and complexity of the risks inherent in that undertaking's business;
(c)
ensure that the members of the administrative, management or supervisory body collectively possess the necessary qualifications, competency, skills and professional experience in the relevant areas of the business in order to effectively manage and oversee the undertaking in a professional manner;
(d)
ensure that each individual member of the administrative, management or supervisory body has the necessary qualifications, competency, skills and professional experience to perform the tasks assigned;
(e)
employ personnel with the skills, knowledge and expertise necessary to carry out the responsibilities allocated to them properly;
(f)
ensure that all personnel are aware of the procedures for the proper carrying out of their responsibilities;
(g)
ensure that the assignment of multiple tasks to individuals and organisational units does not or is not likely to prevent the persons concerned from carrying out any particular function in a sound, honest and objective manner;
(h)
establish information systems which produce complete, reliable, clear, consistent, timely and relevant information concerning the business activities, the commitments assumed and the risks to which the undertaking is exposed;
(i)
maintain adequate and orderly records of the undertaking's business and internal organisation;
(j)
safeguard the security, integrity and confidentiality of information, taking into account the nature of the information in question;
(k)
introduce clear reporting lines that ensure the prompt transfer of information to all persons who need it in a way that enables them to recognise its importance as regards their respective responsibilities;
(l)
adopt a written remuneration policy.
2.
Policies on risk management, internal control, internal audit and, where relevant, outsourcing, shall clearly set out the relevant responsibilities, objectives, processes and reporting procedures to be applied, all of which shall be consistent with the undertaking's overall business strategy.
3.
Insurance and reinsurance undertakings shall establish, implement and maintain a business continuity policy aimed at ensuring, in the case of an interruption to their systems and procedures, the preservation of essential data and functions and the maintenance of insurance and reinsurance activities, or, where that is not possible, the timely recovery of such data and functions and the timely resumption of their insurance or reinsurance activities.
4.
Insurance and reinsurance undertakings shall ensure that at least two persons effectively run the undertaking.
5.
Insurance and reinsurance undertakings shall ensure that effective processes and procedures are in place to prevent conflicts of interest and that potential sources of conflicts of interest are identified and procedures are established in order to ensure that those involved in the implementation of the undertaking's strategies and policies understand where conflicts of interest could arise and how such conflicts are to be addressed.
6.
Insurance and reinsurance undertakings shall monitor, and on a regular basis evaluate, the adequacy and effectiveness of their system of governance and take appropriate measures to address any deficiencies.