CTHRepealedLegislation
Life Insurance (prudential standard) determination No. 3 of 2010 - Prudential Standard LPS 510 - Governance
Prudential Standard LPS 510Prudential Standard LPS 510
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Prudential Standard LPS 510
Governance
| Objectives and key requirements of this Prudential StandardThe ultimate responsibility for the sound and prudent management of life companies and non-operating holding companies registered under the Act (registered NOHCs) rests with their Board of directors. It is essential that regulated institutions (comprising life companies and registered NOHCs) have a sound governance framework and conduct their affairs with a high degree of integrity.A culture that promotes good governance is of benefit to all stakeholders of a regulated institution and helps to maintain public confidence in the regulated institution.This Prudential Standard sets out minimum foundations for good governance of regulated institutions. It aims to ensure that regulated institutions are managed in a sound and prudent manner by a competent Board of directors, which is capable of making reasonable and impartial business judgements in the best interests of the regulated institution and which gives due consideration to the impact of its decisions on policyholders.The governance arrangements of regulated institutions build on these foundations in ways that take account of the size, complexity and risk profile of the institution.The key requirements of this Prudential Standard include:specific requirements with respect to Board size and composition;that the chairperson of the Board must be an independent director;that a Board Audit Committee must be established;that regulated institutions must have a dedicated internal audit function;certain provisions dealing with independence requirements for auditors consistent with those in the Corporations Act 2001;that the Board must have a Remuneration Policy that aligns remuneration and risk management;that a Board Remuneration Committee must be established; andthat the Board must have a policy on Board renewal and procedures for assessing Board performance.A number of requirements also apply to eligible foreign life insurance companies |
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