The Insurance and Pension Commission (IPEC) tasked with the regulation of the insurance market, has published a directive regarding the administration of risk management. This document underlines the basic expectations towards shareholders, the board of directors and management tasks. With regard to underwriting, the directive reminds of the need to have an effective system of identification, as well as, risk monitoring and reduction measures.
Three levels of defense have been set up: the first refers to the management liability, the second lays down the basis of risk management while the last highlights the duties of actuarial experts towards the board of directors and management. These rules of good practices are designed to build confidence toward insurers by showing how companies are able to honor their obligations towards the policyholders under any circumstances.
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