Governance and Operational Risk Management

Supranational Level

Consistency of governance requirements across the Banking, Securities and (Re)Insurance sectors is essential to ensure cross-sectoral coherence. The governance requirements set out in the Solvency II Directive aim at achieving this objective.

Moreover, robust governance requirements are a pre-requisite for an efficient solvency system. Some risks (e.g. operational risk) may also be addressed through governance requirements rather than by only setting quantitative requirements.

A robust governance system is hence of key importance for the adequate management of the insurer and critical to the effectiveness of the supervisory system. It includes compliance with the requirements on fit and proper, risk management, the own risk and solvency assessment (ORSA), internal control, internal audit, the actuarial function and outsourcing.

National Level

The governance of (Re)Insurance companies will evolve in the course of the year 2009.

Experiences in the Banking and Funds industries may be valuable for setting up an (Operational) Risk Management framework.

To find out more about Operational Risks for the (Re)Insurance companies in Luxembourg,
click here (French version only).