4.5 Suitability assessment by the company

4:99 The assessment of individual and collective suitability must in principle take place before the position is taken up and, subsequently, on a regular basis in the course of the position.

4.5.1 Assessment before taking up the position 

4:100 Before appointing an applicant, the company must conduct a due diligence investigation, the specific level of which should depend on the intended position. This Manual contains concrete recommendations and guidelines for the company to use when assessing a person’s suitability.

4:101 Where the company has completed the investigation and wishes to consider the person's application for the particular position, it is advisable to record this internal selection decision in writing. The decision should contain not only the selection decision itself but also any considerations upon which it is based (reasons for individual and, if applicable, collective suitability). Where appropriate, it should also mention any agreements that have been made to improve the expertise of the person concerned on certain points.

4.5.2 Reassessment in the course of the position

4:102 The suitability requirement is ongoing: in accordance with Article 40 of the Insurance Supervision Law, the persons concerned must possess the appropriate expertise and act with the required professional integrity at all times.

1) Periodic reassessment

4:103 It is recommended that the board of directors and, where appropriate, the nomination committee periodically assess the structure, size, composition and performance of the board of directors on the one hand, and the knowledge, skills, experience and degree of involvement of the individual members of the board of directors and the board of directors as a whole, on the other hand. This periodic reassessment should take place once a year for significant companies and every two years for less significant companies. 

2) Reassessment based on specific events

4:104 Whenever the company is informed of an event that may affect the assessment of the individual suitability of a person subject to suitability assessment or the assessment of the collective suitability of a decision-making body[1], it should consider whether a formal reassessment is necessary in view of the impact of this event on the suitability of the person concerned, and document the underlying considerations in writing. If the company concludes that an ad hoc reassessment is necessary, it must notify the NBB immediately. Examples of events that should automatically trigger a reassessment of a body’s collective suitability include: a significant change in the company’s business model, risk appetite or strategy; a significant change in the composition of the board of directors or management committee; reasonable grounds to suspect that money laundering or terrorist financing has been or is being committed or attempted; etc.

3) Procedures and processes for suitability reassessment

4:105 It is recommended that procedures and processes be in place to review the individual and collective suitability of persons covered by this Manual continuously, periodically and in response to specific events. Periodic reassessments, the review of whether an ad hoc reassessment is necessary in case of specific events and the reassessments triggered by those specific events themselves should be documented in writing.

4:106 Companies must immediately inform the NBB of any significant shortcomings identified during periodic reassessments or reassessments triggered by specific events. To that end, they should submit the fit & proper form “New elements”. 

4) Conclusion of the assessment or reassessment

4:107 If a company’s assessment or reassessment concludes that a person is not suitable for the intended position, that person should not be appointed or, if he/she has already been appointed, this appointment should be revoked. If a company’s assessment or reassessment identifies easily remediable shortcomings, with the exception of shortcomings related to the criteria relevant to the assessment of professional integrity, the company should take appropriate corrective measures to overcome those shortcomings in a timely manner.

4:108 In any event, the NBB should be notified without delay of any significant shortcoming identified[2]. This notification should include the measures taken or envisaged to remedy those shortcomings and the timeline for their implementation[3]

[1] See Article 81, § 4 of the Insurance Supervision Law.

[2] See Article 81, § 4 of the Insurance Supervision Law.

[3] See in particular the explanatory memorandum to the Law of 5 December 2017 containing various financial provisions, Parliamentary Documents, Chamber, 2017-2018, Doc. 54 - 2682/001, p. 24, which provides that it is the primary responsibility of the person concerned and of the institution to immediately report to the supervisor any relevant new fact that may affect the suitability of the person concerned: they must provide the supervisor with accurate and complete information at all times to enable the latter to form an accurate opinion of the person’s suitability. Failure to do so may, where appropriate, result in the supervisor disqualifying the person concerned, with the implication that he/she is no longer considered suitable.