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RESOLUTION OF THE MINISTRY OF FINANCE OF THE REPUBLIC OF BELARUS

of September 28, 2016 No. 86

About approval of the Instruction about the organization of internal control system in insurance companies

Based on Item 29-2 of the Regulations on insurance activity in the Republic of Belarus approved by the Presidential decree of the Republic of Belarus of August 25, 2006 No. 530 "About insurance activity", Item 10 of the Regulations on the Ministry of Finance of the Republic of Belarus approved by the resolution of Council of Ministers of the Republic of Belarus of October 31, 2001 No. 1585 "Questions of the Ministry of Finance of the Republic of Belarus", the Ministry of Finance of the Republic of Belarus DECIDES:

1. Approve the enclosed Instruction about the organization of internal control system in insurance companies.

2. This resolution becomes effective since October 22, 2016.

First Deputy Minister

M. L. Yermolovich

 

Approved by the Resolution of the Ministry of Finance of the Republic of Belarus of September 28, 2016 No. 86

The instruction about the organization of internal control system in insurance companies

1. This Instruction establishes requirements to internal control system in insurance companies.

2. For the purposes of this Instruction terms in the values determined by Item 2 of the Regulations on insurance activity in the Republic of Belarus approved by the Presidential decree of the Republic of Belarus of August 25, 2006 No. 530 "About insurance activity" are used (The national register of legal acts of the Republic of Belarus, 2006, No. 143, 1/7866; National legal Internet portal of the Republic of Belarus, 19.04. 2014, 1/14942), and also following terms and their determinations:

internal control - the process performed by insurance company for the purpose of ensuring the ordered and effective implementation of insurance activity according to requirements of the legislation and local regulatory legal acts of insurance company;

availability of information - property of the automated system timely and authentically to provide the information required according to statutory rules and access rights;

information security - multi-level complex of organizational measures, the hardware-software and technical means providing protection against accidental and deliberate threats as a result of which realization violation of properties of the availability, integrity, authenticity or confidentiality processed, which is kept and the transmitted data is possible;

confidentiality of information - property of the automated system to provide exception of information access of unauthorized users;

governing body of insurance company - the owner of property of the unitary enterprise or persons authorized by this owner, general meeting of participants or the participant in the economic society consisting of one participant, the board of directors (supervisory board);

internal control system - set of internal control, internal audit, the organizational structure and local regulatory legal acts of insurance company determining strategy, techniques and procedures of internal control, risk management, risk management process and also powers and responsibility of governing bodies and employees of insurance companies;

risk management system - set of organizational structure of insurance company, powers and responsibility of employees of the insurer, local regulatory legal acts determining strategy, techniques and procedures of risk management, and also the risk management process directed to achievement of financial reliability of the insurer;

risk - the potential possibility (probability) of incurring which is objectively existing in uncertainty conditions inherent in insurance activity insurance company of losses (losses), non receipt of the planned income and (or) deteriorations in liquidity and (or) approach of other adverse effects for the insurer owing to emergence of various events connected with internal and (or) external factors of its activities;

integrity and authenticity of information - property of the automated system to keep invariance or to find the fact of unauthorized change of information and the attributes establishing authorship.

3. The insurance company according to the local regulatory legal acts approved by it organizes the internal control system corresponding to tasks and the strategy of the insurer and providing the proper level of financial reliability and information security of insurance company.

In insurance company the local regulatory legal acts containing techniques and procedures of internal control which shall be consecutive shall be developed and approved, have the extent of disaggregation corresponding to scales and complexity of activities of the insurer, to be applied uniformly in all its divisions including isolated.

The local regulatory legal acts specified in part two of this Item need to be subjected at least once a year to check on relevance, including taking into account changes in its activities and condition, essential to the insurer, and by results of assessment to make corresponding changes and (or) amendments.

4. The internal control system of insurance company covers control for:

achievement by insurance company of the set strategic objectives and the tasks;

ensuring efficiency and effectiveness of financial and economic activity of insurance company, its solvency;

effective management of the insurer of assets and liabilities;

reliability, completeness, objectivity and present of conducting financial accounting, creation and submission of accounting (financial) and other records to governing bodies of insurance company and state bodies;

efficiency of functioning of risk management system;

activities of information systems, management of information flows (obtaining and information transfer, ensuring information security);

observance of the legislation of the Republic of Belarus by insurance company, local regulatory legal acts of the insurer.

5. The insurance company performs the following types of internal control:

preliminary internal control - the control which is carried out before implementation of the insurance, and also other activities which are according to the legislation of the Republic of Belarus and constituent documents object of activity of the insurer, directed to determination of its efficiency and use in the areas determined by local regulatory legal acts of insurance company;

the current internal control - the control exercised in the course of execution by employees of insurance company of the obligations assigned to them and which is carried out for the prevention of the facts of variations from requirements of the legislation of the Republic of Belarus, local regulatory legal acts of the insurer, timely and reliable reflection of transactions for insurance in financial accounting, ensuring target use of means and safety of property of insurance company;

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