Delimitation of responsibilities for the suitability assessment
Article 273(1) of Delegated Regulation 2015/35 provides 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".
4.3.1 Primary responsibility of the undertakings
The primary responsibility for the fitness and propriety of persons subject to a suitability assessment under the Insurance Supervision Law lies with the undertaking. To this end, the undertaking should develop a suitability policy and check a person’s suitability, by carrying out an assessment (see point 4.5). Amongst other things, the assessment process must be based upon information provided by the person who is to be assessed.
If the result of the assessment of suitability is positive, the undertaking must in turn send the NBB full, reliable information about the person’s suitability. Based upon this information, supplemented by details collected by the supervisory authority on its own initiative, the NBB will carry out its own assessment of the suitability of the person in question. Such assessment deals not only with ensuring that the person is effectively fit and proper, but also takes account of the individual and collective assessment procedure used to assess the undertaking. The greater the margin of assessment for a given aspect (e.g. as far as skills, etc. are concerned – see point 22.214.171.124), the greater the weight the NBB can give to this internal procedure put into place by the undertaking and therefore limit itself to verifying that this assessment procedure offers the necessary guarantees.
4.3.2 The responsibilities of the nbb – “gatekeeper”
When a new person is deemed fit by the undertaking, the NBB will collect the necessary information and carry out an assessment on the basis of which it will decide on final approval. For the purposes of its own assessment, the NBB will first of all use the information supplied by the undertaking and by the person in question as a basis.
This information is collected using standard forms designed especially for this purpose (see the annexed suitability form, which comprises two parts: Part A, to be completed by the person concerned, and Part B, to be completed by the undertaking). Obviously the NBB is free to ask for any additional information and, where applicable, to interview the person in question. More detailed explanations about the NBB's assessment procedure are given further on in this chapter.
The longer that a person has held a position, the more practical information the undertaking and the NBB will have about the way that the person works within the undertaking (e.g. by looking at reports made by the statutory governing body, audits, etc.) The undertaking and the NBB both have a responsibility to reassess this information whenever this may appear necessary (see points 4.5.3 and 126.96.36.199).
4.3.3 Responsibility assessment of suitability on an ongoing basis
The legal requirement, as laid down in the Insurance Supervision Law, always to have persons who are suitable to hold the positions which fall within the scope of the Law is an obligation which all undertakings must fulfil at all times. The persons in question must, at any time, “be” skilled and act with professional integrity. The specific details for continuous monitoring of suitability are discussed in more detail later in this handbook.
However, as regards the respective responsibilities of the parties involved for ensuring the ongoing nature of the suitability criteria, the following shall apply:
As regards the person in question
On the standard forms drawn up by the NBB, the person in question is expected to declare that s/he has made every effort to comply constantly with the suitability standards for the purposes of the position which s/he already holds or plans to hold.
Persons who already hold positions must immediately inform the undertaking of any event which is likely to influence their fitness and propriety.
As regards the undertaking
Where an undertaking considers that doubts might arise about the fitness and propriety of a person who holds a position or the collective suitability of the board of directors or management committee, the NBB expects it to take steps as quickly as possible and to make every effort to take a close look at these doubts. The undertaking must also inform the NBB immediately thereof.
In order to guarantee the constant suitability of the persons in question, the following is recommended:
- When a person takes up a position, it is important for the undertaking to ask him or her for a written declaration in which s/he confirms that s/he will unreservedly abide by the current suitability standards for this position and that s/he will give immediate notice of any events which might turn out to be important in this respect.
- The person in question should be reminded of this declaration. In this way, the undertaking may, on an annual basis for significant undertakings and every two years for less significant undertakings, explicitly ask the persons in question whether they are aware of any relevant, significant changes in relation to their compliance with the suitability standards.
As the financial sector is constantly on the move, continuing training would appear to be a necessary condition, although in principle it is not on its own sufficient to fulfil the requirement for fitness at all times. The NBB expects the undertaking to take all necessary steps to implement judicious continuing training.
As regards the supervisory authority
The fitness and propriety of persons who fall within the scope of the Insurance Supervision Law is supervised on an ongoing basis by the NBB. Whenever the NBB becomes aware of any information which raises doubts about the suitability of a person who currently holds a position, the NBB will immediately carry out a more in-depth examination and, if required, a reassessment. In addition, the NBB will also reassess the fitness and propriety of the persons concerned on an ongoing basis, taking into account the elements observed in the course of prudential supervision and in particular through inspections, thematic surveys, etc.