Industry Questions/Comments
[Section 67(5) Insurance Act 2018]
Is it an actual procedure that is required or a policy statement that defines the approach and who is responsible for the various aspects of the approach? Guidance should be given on what procedure should contain/cover at a minimum so that companies can determine with some degree of certainty whether what they have is sufficient.
Central Bank of Trinidad and Tobago
Generally, it is expected that directors will establish policies and procedures in accordance with international best practice and proper corporate governance requirements and exercise their own due diligence and reasonableness to determine the most appropriate form.
The legislation requires the directors to establish actual policies and procedures for determination of remuneration of themselves and officers.
Remuneration plays a key role in the way that management and directors manage a company’s risks. If excessive risk-taking behavior is rewarded i.e. by remunerating based on short-term gains in exchange for long-term losses, policyholders become exposed to risk.
Consequently, procedures on remuneration should clearly identify and address this risk, as well as specify repercussions for deviations.
