HC-4 HC-4 Annual Certification[versions up to January 2011]
HC-4.1 HC-4.1 Annual Board Review and Certification[versions up to January 2011]
HC-4.1.1 [versions up to January 2011]
The Board must assess and document each year whether the internal corporate governance processes that it has implemented have successfully achieved their objectives, and consequently whether the Board has fulfilled its responsibilities for directing and monitoring the overall conduct of the licensee's affairs.
HC-4.1.2 [versions up to January 2011]
The requirements in Chapter HC-4 do not apply to
captive insurance firms , but should be considered as guidance. Unincorporated entities and single person companies are exempt from these requirements.Amended: January 2007HC-4.1.3 [versions up to January 2011]
The results of the review referred to in Paragraph HC-4.1.1 must be summarised in a written certification, to be signed by all Board members, and sent to the CBB within 3 months of the financial year-end of the licensee. The Board must report any material deficiencies identified during the review, along with an action plan and timescales for their correction.
Amended: January 2007HC-4.1.4 [versions up to January 2011]
The Board certification comprises a prescribed standard statement, to be signed by all Board members, attached to which should be a summary of the steps the Board has taken in carrying out the review; a summary of the results of that review, and a summary action plan (with timescales) for addressing any identified material deficiencies. The prescribed standard statement is included in Part B of Volume 3 (Insurance), under 'CBB Reporting Forms': see '
Directors ' High-Level Controls Certification' contained in the Insurance Firm Return (Form IFR) and the Insurance Intermediaries and Managers Return (Form IMR).Amended: January 2007HC-4.2 HC-4.2 Scope of the Review[versions up to January 2011]
HC-4.2.1 [versions up to January 2011]
The Board's review should cover the following specific matters:
(a) That the Board has reassessed the licensee's objectives and plans, and has reviewed the licensee's corporate strategy document;(b) That the Board has reassessed the licensee's overall risk profile, and its mapping of risks and the control environment put in place to meet those risks (see Section HC-3.2). The Board must comment whether the control environment remains effective and appropriate;(c) That the Board has assessed the licensee's internal controls, to confirm that these are based on established policies and procedures approved by the Board and provide reasonable assurance of the integrity and reliability of its financial records;(d) That the Board has assessed whether adherence to established internal limits and controls was continuously monitored;(e) That the Board has assessed that all new (or material changes to) significant policies, procedures and products introduced by the licensee since the last Board certification were appropriately reviewed and approved at the time;(f) That the Board has assessed that management and staff have complied with the licensee's corporate code of conduct (see Section HC-3.6); and(g) That in the period under review, the Board had received and reviewed the external auditor's management letter within six months of the (previous) financial year end, together with the licensee's audit committee and senior management comments on the letter and any proposed actions.Amended: January 2007HC-4.2.2 [versions up to January 2011]
With respect to HC-4.2.1 (g), a
Director's certificate received (for example) no later than 31 March 2004, covering the year ending 31 December 2003, would need to certify that the management letter for the year ending 31 December 2002 was received and reviewed by the Board by 30 June 2003.
