4.6 Suitability assessment by the NBB

4.6.1 Timing of the assessment

4:109 The NBB assesses the suitability of persons who wish to hold a position falling within the scope of the Insurance Supervision Law before they actually take up the position. It also carries out an assessment when warranted by facts and/or circumstances. The concrete scope and method of the assessment differ depending on when it takes place. Before taking up the position

4:110 This assessment takes place either when a company applies for authorisation[1] or when an already authorised company intends to appoint a person to a position which falls within the scope of the Insurance Supervision Law. In the latter case, the assessment can relate to either a person already working in the company concerned or an external person. While holding the position

4:111 As part of the NBB’s ongoing prudential supervision, the suitability of the persons subject to the Insurance Supervision Law is also reassessed if there are new facts and/or circumstances that provide reasonable grounds for such a reassessment. It is for the NBB to determine what constitutes new facts and/or circumstances.

1) Reassessment based on specific signals

4:112 In practice, the NBB relies on signals that cast doubt on a person’s suitability and thus may justify the need to review whether the person concerned is sufficiently suitable for the position he/she holds. These signals can be very diverse[2].

4:113 When a person in office is subject to criminal, administrative, civil or disciplinary proceedings that are likely to call into question the expertise and professional integrity of that person, the NBB may ask the board of directors of the company concerned whether - in the light of the facts with which the person concerned is charged - it considers that it can maintain confidence in that person. The company must obtain full transparency from the person concerned with regard to the charges against him/her. In any case, the NBB carries out its own assessment, taking into account the reasoning of the board of directors and the nature of the charges.

4:114 Where the NBB carries out a reassessment, it focuses on the actions and performance of the person concerned in practice. In particular, the NBB examines how the person concerned has applied his/her knowledge and skills, and whether or not the person’s decision-making and business management demonstrate professional conduct.

4:115 A reassessment may be carried out for one or more persons at the same time, depending on the reason for the reassessment. For instance, if the reassessment was triggered by concerns about the company culture, it is possible that several persons will be reassessed. Conversely, if the reassessment is motivated by concerns about specific activities of the company (a specific product or market, or a particular internal control line) that fall under a specific person’s duties, it will likely focus on that particular person, without prejudice to the possibility that other persons may subsequently be held liable for failing to perform their supervisory duties.

4:116 The appointment of a new director does not automatically trigger a reassessment of the collective suitability of the members of the company’s board of directors that are already in office. However, a change in the composition of the board of directors, whether or not due to the entry into office of a new person, may constitute reasonable grounds for a reassessment of collective suitability. This may be the case inter alia if a person with a certain expertise resigns and no (temporary) replacement is sought or found, or if members of the board of directors change positions (e.g. from non-executive to executive director).

2) Reassessment in the absence of specific signals

4:117 The NBB may also reassess the individual and collective suitability of persons subject to suitability assessment on an ongoing basis ‑ in the absence of specific signals ‑ as part of its general risk-based supervision.

4.6.2 Assessment procedure Before taking up the position

4:118 In accordance with Article 81 of the Insurance Supervision Law, companies must inform the NBB in advance of any proposed appointment, reappointment or dismissal of persons falling within the scope of this law. When a person changes position, including when a significant new division of tasks is established within the board of directors or management committee, this must be considered as a new appointment.

4:119 In accordance with the principles of sound governance, the NBB endeavours to reach its decision within a reasonable timeframe, preferably within 2 months. However, since suitability assessments may, depending on the case, entail additional verifications (e.g. holding one or more interviews, consulting other [foreign] supervisors, consulting references provided, requesting additional information from judicial or other authorities, etc.), which in turn may require additional analytical work from the NBB, the actual examination of the file may take more time. In such (time-consuming or complex) cases, the NBB’s guideline is that a decision should be taken within 4 months.

4:120 These indicative time limits start from the moment the duly completed forms and all necessary information have been submitted to the NBB. If the NBB requests additional information from the company, the deadlines are suspended until the relevant information is provided. Companies are requested to take into account these indicative time limits for timely transmission of the written file through the standard forms.

4:121 The appointment cannot take place before the NBB has made a decision. The company may contact the NBB through the usual channels shortly after sending the duly completed forms in order to find out whether or not the NBB considers the case as time-consuming or complex. If the case is considered time-consuming or complex, the appointment may, exceptionally, take place under a condition precedent and be made public with mention of this condition.

4:122 When a proposed appointment relates to a person who is being proposed for the first time for a position falling within the scope of the law, the NBB consults the FSMA[3]. The FSMA sends any relevant factual information to the NBB within one week from receipt of the request for advice. While holding the position

4:123 It is for the NBB to decide whether the suitability of a person in office should be reassessed. For instance, the NBB may decide to reassess the suitability of the persons concerned as a result of findings or analyses in the context of its supervision of a specific company. This decision may be based, for example, on reports or findings showing a negative or dismissive attitude towards generally accepted best practice (e.g. regarding transparent and complete information flow to the statutory governing body), the emergence of concrete doubts as to whether the company, members of its board of directors or management committee or the persons responsible for its independent control functions in the past or present complied with anti-money laundering and counter-terrorist financing requirements, repeated or deliberate non-compliance with the NBB’s recommendations, an established lack of availability to attend meetings, disclosure of incomplete or incorrect information to the NBB or shareholders, an uncooperative attitude towards the NBB, etc.[4]

4:124 In the event of a reassessment of a person, the NBB will specify to the company what information it wishes to receive. The NBB may request any information necessary for its assessment (including periodic assessments carried out by the company) or interview the persons concerned.

4:125 When carrying out a reassessment, the NBB may ask the person concerned to cooperate. If the person refuses to do so, the NBB may inform the company in order to obtain the necessary information. If the result is not satisfactory, the NBB may take administrative measures (in particular the replacement of the person concerned) and/or impose administrative sanctions.

4.6.3 Information for the assessment Sources of information for the NBB

4:126 In order to obtain as complete a picture as possible of a person’s suitability, the NBB uses a wide range of information sources, such as:

  • the current standard form, duly filled in and signed by the company and the person concerned (see Chapter 5 of this Manual), including any information which the NBB may, if necessary, obtain from the references listed therein;
  • the suitability assessments carried out by the company, including the assessment of collective expertise by the board of directors and the assessment of conflicts of interest and time commitment;
  • the supervisory information and background available to the NBB as prudential authority;
  • the company's suitability policy, the job profile that the company has drawn up for the position in question and the board of directors' selection decision, the minutes of which must be annexed to the suitability form;
  • opinions of the FSMA;
  • opinions of other authorities supervising the company (such as authorities in charge of anti-money laundering and counter-terrorist financing supervision, financial intelligence units and competent law enforcement authorities, tax authorities, etc.);
  • information obtained from judicial authorities;
  • information obtained from EIOPA databases (e.g. on suitability);
  • where applicable, the periodic reassessment of the person concerned carried out by the company (and recorded in writing) on the basis of the applicable job profile, including the considerations that led to this reassessment;
  • any other information available to the company that may be relevant for the suitability assessment;
  • public information.

4:127 The NBB is authorised to request any information it considers necessary to assess the suitability of a person[5]. It is important that companies spontaneously and systematically inform the NBB of any changes to their suitability policy. Deliberate withholding or incorrect transmission of information

4:128 The company and the person to be assessed must provide the NBB with accurate and complete information through the standard forms and upon its request. If there is doubt as to the relevance or importance of any information, the institution should nevertheless transmit the information or contact the NBB through the usual channels to verify whether it is necessary to do so. Convictions of any kind must always be mentioned on the forms. Only the NBB is authorised to judge to what extent they are relevant or important to the suitability assessment.

4:129 A finding of non-compliance in this respect will have a negative impact on the NBB’s assessment. The NBB considers any failure to transmit relevant and important information as supervisory background information. The NBB may detect such non-compliance through any source of information.

4:130 Any deliberate withholding of information will immediately lead to a refusal, as this shows a lack of transparency towards the NBB.

4.6.4 Interview technique

4:131 As part of a suitability assessment, the NBB may choose to interview the person concerned. It will do so in particular if it considers that a discussion with the person concerned is desirable or necessary to obtain a complete and clear picture of that person’s expertise and/or professional integrity. In this respect, the NBB will apply a risk-based approach and take into account the company’s nature, size and risk profile, the position envisaged and any other details which might raise questions about the information provided by the company and the person concerned. As a rule, in the case of significant companies, an interview is always conducted for new appointments to the position of CEO (or equivalent position) or chair of the board of directors. In all other cases, depending on specific needs, interviews can also be used as a tool for assessing skills and integrity. If concerns remain after the initial interview, a second, specific interview may be held to address them.

4:132 The interview panel consists of at least two members. For applicants for the position of Compliance Officer, the interview may be conducted jointly with the FSMA.

4:133 During this interview, the NBB verifies whether the image that the company has created of a person’s suitability matches the way in which that person presents himself/herself during the interview, possibly taking into account other supervisory information and background relating to the company or the person concerned.

4:134 The interview also allows the NBB to ensure that the person concerned is well informed of its own expectations and those of the company. Where applicable, the NBB will draw the company’s attention to areas where further efforts are needed (e.g. a lack of knowledge about a specific subject).

4:135 In principle, the interview takes place without the company being present, although the NBB may decide otherwise.

4:136 If the interview raises or confirms doubts as to the applicant's suitability, or highlights a number of areas for improvement, the NBB will send this assessment of the interview in writing to both the chair of the company's board of directors and the person concerned.

4:137 When a person leaves a position, it can be particularly useful for the NBB to conduct an exit interview to obtain further details about the circumstances in which the person is leaving the position or about the governance of the company in general.

4.6.5 Outcome and consequences of the assessment

4:138 Upon completion of the suitability assessment (as the case may be before or during the performance of a specific position), the NBB immediately informs the company of the outcome of the assessment and, where appropriate, of some underlying findings.

4:139 Where appropriate, the NBB may accompany its approval decision with ancillary provisions to remedy any minor shortcomings found. Such ancillary provisions may not concern aspects related to professional integrity. 

4:140 They may take the form of recommendations[6], but also conditions[7] or obligations[8]. As suitability is permanent, the NBB at all times has the possibility to monitor compliance with such conditions or obligations, and, if necessary, to carry out a reassessment.

4:141 Where a company fails to provide the NBB with sufficient information regarding the suitability of a person to be assessed, the NBB either informs the company that the appointment of the person concerned cannot be approved because his/her suitability has not been sufficiently demonstrated, and requests the company to withdraw the file, or takes a negative decision.

4:142 Any negative decisions by the NBB as to a person’s suitability are always thoroughly justified. These decisions can be appealed against before the Council of State. The effective possibilities of appeal are specified in the notification letter.

4:143 Finally, it should be noted that the NBB may also - irrespective of any formal positive, negative or conditional suitability decision - contact the company to provide feedback on a submitted application. For example, if the company withdraws its application in the course of the NBB’s examination of the file, the latter may provide feedback on the issues identified, as part of the company’s responsibility for assessing suitability on the one hand, and/or the broader governance perspective on the other. Where necessary, the NBB may also impose appropriate prudential measures to remedy certain deficiencies in the company's suitability policy or governance.

[1] For appointments considered in the context of an authorisation application, the same suitability assessment criteria should be applied and the assessment procedure should be applied in broadly the same way, taking into account the specificities of the authorisation context. However, the NBB makes its decision according to an ad hoc schedule, so that the taking up of the position coincides with the authorisation decision.

[2] For example the opening of or developments in criminal, civil, administrative or disciplinary proceedings, the existence of reasonable grounds to suspect that money laundering or terrorist financing has been or is being committed or attempted or there is an increased risk thereof in connection with the company concerned, an unexpected change in the company’s results, concerns about the business model applied, concerns about the integrity and control of the company’s management, expansion of the company’s activities abroad, outsourcing of (core) tasks, systematic lack of response or late response to requests for information made by the supervisor, high staff turnover, poor administration and (repeated) violations of laws and regulations. In certain cases, it is a combination of signals that leads the supervisor to doubt a person’s suitability.

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

[4] 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. 

[5] Article 36/19 of the Law of 22 February 1998 establishing the organic statute of the NBB.

[6] Recommendations are intended to encourage best practices within companies and to highlight desirable improvements. The NBB can formulate recommendations not only in the context of suitability assessments, but in all areas of prudential supervision.

[7] A condition is a requirement imposed on the company subject to prudential supervision (and which may also have direct implications for the appointee) without which a negative decision would be issued. The most common conditions include: (i) a commitment to undergo specific training; (ii) relinquishment of a management position, mandate or other position outside the institution; (iii) for persons responsible for independent control functions (who are just below management committee level), a probationary period at the end of which the NBB may decide whether or not to validate its initial positive decision.

[8] The NBB’s decision may also include an obligation to provide specific information for the purposes of the ongoing fit and proper assessment or to adopt a specific measure relating to fitness and propriety which does not affect the appointee but the entire supervised company. Unlike a condition, non-compliance with an obligation does not automatically affect the fitness and propriety of the appointee. The most common obligations are: (i) reporting ongoing legal proceedings; (ii) responding to requests for improvement of written policies on conflicts of interest; (iii) responding to requests for improvement in the area of collective suitability.