Pillar2 "qualitative requirements"
AT Global can offer you a wide range of services related to Pillar 2 through the system of governance of an insurance company including the risk management function, the compliance function, the internal audit function and the actuarial function.
Pillar 2 "qualitative requirements" promotes internal control, risk management and corporate governance.
For what concerns the requirements of pillar 2, the experience of AT Global may also be valuable to your company. Through our history - AT Global used to be part of one of the Big 4 - we have accumulated considerable expertise in the field of internal control processes and risk management, as was introduced earlier.
The frameworks developed by The Committee of Sponsoring Organisations of the Treadway Commission (COSO) are relevant for that pillar 2. COSO developed two such frameworks:
- COSO Internal Control - Integrated framework
- COSO Enterprise Risk Management - Integrated framework
The first framework defines internal control as a process, implemented by the board of directors, management and other personnel and designed to promote the achievement of the three following categories of objectives:
- Effectiveness and efficiency of operations
- Reliability of financial reporting
- Compliance with laws and regulations
A sound system of internal control provides reasonable, but not absolute, assurance regarding the achievement of the objectives of an organisation in these areas.
The second framework of COSO referred to hereabove is dedicated to the management of risk by companies. It includes elements of the first framework about internal control and develops them on basis of a vision oriented towards enterprise risk.
We are familiar with these two frameworks developed by COSO and can help you embed them in your company.
One of the major requirements of Solvency II under pillar 2 is to carry out a so-called "Own Risk and Solvency Assessment" (ORSA), which is an additional capital evaluation based on internal assessment of risks and controls, subject to supervisory review, and to report regularly on it. As risk experts, we can surely assist you in that process.
Still under pillar 2, the system of governance of an insurance company includes the risk management function, the compliance function, the internal audit function and the actuarial function. These functions may be outsourced and AT Global has an in-depth experience in each one of these roles for insurance undertakings.