4.4 Organisational requirements for the suitability assessment

4:90 As stated above, the primary responsibility for suitability assessment lies with the company. To carry out this assessment, it must have policies, procedures and processes in place[1].  

4.4.1. Suitability policy

4:91 The company should develop and implement a suitability policy that takes into account applicable regulations and is aligned with its overall governance framework, corporate culture and risk appetite. In this context, the company’s board of directors should adopt and update a policy for suitability assessment that covers directors, senior managers and persons responsible for independent control functions. This policy should include at least the following:

  1. the process for the selection, appointment, reappointment and succession planning of members of the board of directors, senior managers and persons responsible for independent control functions, and the applicable internal procedure for the assessment of the suitability of these persons;
  2. the criteria to be used in the suitability assessment, which should include at least the 5 suitability criteria set out in this Manual; and
  3. how the assessment is documented.

4:92 Where, taking into account the proportionality principle, a nomination committee has been established, it contributes to the development of such a policy. The board of directors and, where appropriate, the nomination committee may also call on the HR, Legal and Compliance departments to actively contribute to the development of this policy.

4:93 For more information on the suitability policy, please refer to the overarching Circular on governance NBB_2016_31. 

4.4.2. Selection process and succession plans

4:94 Without prejudice to the shareholders’ rights to appoint members of the board of directors, the latter must, where appropriate through the nomination committee, actively contribute to the selection of applicants for vacant positions as member of the board of directors, senior manager (with the exception of senior managers at “N-1” level) and person responsible for an independent control function, where appropriate in cooperation with the HR, Legal and Compliance departments.

4:95 Without prejudice to the shareholders’ rights to appoint and replace all members of the board of directors simultaneously, the latter should establish succession plans for its members, senior managers (with the exception of senior managers at “N-1” level) and persons responsible for independent control functions.

4:96 For more information on these subjects, please refer to the overarching Circular on governance NBB_2016_31.

4.4.3. Induction and training

4:97 It is recommended that insurance and reinsurance companies provide directors and senior managers (with the exception of senior managers at “N-1” level) with relevant induction and training programmes, where appropriate individually tailored to their profile.

4:98 For more information on this subject, please refer to the overarching Circular on governance NBB_2016_31.

[1] Article 273(1) of Delegated Regulation 2015/35 provides in this respect that "[i]nsurance and reinsurance undertakings shall establish, implement and maintain documented policies and adequate procedures to ensure that all persons who effectively run the undertaking or have other key functions are at all times fit and proper within the meaning of Article 42 of Directive 2009/138/EC".