04 Nov 2008, David Benyon, Operational Risk & Regulation
FRANKFURT – A new issues paper from the Committee of European Insurance and Occupational Pensions Supervisors (Ceiops) highlights operational risks in governance, risk management and outsourcing for insurers in the European Union (EU). The document focuses on Level 2 implementing measures for systems of governance.
The issues paper is a response to industry comments received after Ceiops’ July 2007 risk management paper. The issues paper includes chapters on risk management, internal controls, general governance requirements, fit and proper requirements, internal audit, the actuarial function and outsourcing.
The risk management chapter includes specific definitions for operational risk and its effective management – including internal processes, internal and external risk factors, and the implementation of a robust and documented op risk framework.
The final chapter on outsourcing also highlights operational risk, outlining a firm’s responsibilities in verifying the abilities of service providers to mitigate its operational risks. The paper underlines the risk management responsibilities for firms seeking to outsource, highlighting the effect of impaired visibility that outsourcing can have for supervision.
The paper can be downloaded from the link below.