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Long Term Insurance Act, 1998 (Act No. 52 of 1998)

Board Notices

Notice on Governance and Risk Management Framework for Insurers, 2014

Part 4 : Risk Management System

12. Fit and proper policy

 

An insurer's fit and proper policy must, at least,—

(a) provide for the prudent management of the risks that a director, senior manager, public officer, auditor, statutory actuary (or his or her alternate), head of a control function or significant owner (collectively referred to as "responsible person") who is not fit and proper poses to its insurance business, financial soundness and fair treatment of policyholders;
(b) clearly define and document the fit and proper criteria required for each responsible person having regard to—
(i) any prescribed fit and proper requirements; and
(ii) the need to set high internal standards of ethics and integrity that promote sound corporate governance and appropriate and pertinent expertise, educational qualifications or experience, skills and knowledge in respect of the duties that such a person must perform;
(c) include the processes (including the decision-making processes) to be undertaken in assessing whether a responsible person is fit and proper;
(d) specify the actions to be taken where the insurer assesses a responsible person as not being fit and proper, which must include notifying the Authority of such an assessment and the actions taken;
(e) require periodic (at least annual) fit and proper assessments for each responsible person;
(f) require that sufficient documentation for each fit and proper assessment is retained to demonstrate the fitness and propriety of responsible persons and their immediate predecessors;
(g) include adequate provisions to allow confidential reporting if a person believes that a responsible person does not meet the insurer's fit and proper criteria and for the protection of such a person;
(h) provide that responsible persons consent to being subject to the fit and proper policy; and
(i) provide that the insurer consents to any former responsible person disclosing information to the Authority, including their reasons for resignation, early retirement or removal.