Reinsurance Risk Governance Guideline for Insurers

August 16, 2021 CIRCULAR LETTER TO: INSURERS REGISTERED UNDER THE INSURANCE ACT, 2018 CARIBBEAN ASSOCIATION OF ACTUARIES INSTITUTE OF CHARTERED ACCOUNTANTS OF TRINIDAD AND TOBAGO ASSOCIATION OF TRINIDAD & TOBAGO INSURANCE COMPANIES SECRETARIAT REF: CB-OIFI-1908/2021 REINSURANCE RISK GOVERNANCE GUIDELINE FOR INSURERS On November 26, 2020, the Central Bank of Trinidad and Tobago (“Central Bank”) issued a draft Reinsurance Risk Governance Guideline for Insurers (“Guideline”) to the industry for comment. The Central Bank has considered all feedback received and is pleased to issue the finalized Reinsurance Risk Governance Guideline for Insurers for your information. The Central Bank recognizes the importance of reinsurance as a risk management tool used by insurers. Reinsurance, however, exposes an insurer to other risks including operational, legal, counterparty and liquidity risk. Given that inadequate reinsurance risk management practices and procedures can materially affect an insurer’s financial condition and reputation, jeopardizing policyholder security, this Guideline sets out the Central Bank’s expectations regarding effective reinsurance policies and procedures. In addition to making the Central Bank’s expectations more transparent to its stakeholders, the Guideline also seeks to facilitate increased application of safe and sound practices, and protect the interest of policyholders. Please note that the Guideline can be accessed on the Central Bank’s website at https://www.central-bank.org.tt/publications/legislations-and-guidelines/insurance-sector￾legislation-and-guidelines. The matrix of comments received during the consultation period and the Central Bank’s responses can be accessed at https://www.central-bank.org.tt/core-functions/supervision/insurance￾sector/draft-and-consultation-papers. The Central Bank takes this opportunity to thank you for your feedback. Should you have any queries, kindly contact the Actuarial Unit of the Financial Institutions Supervision Department at FISDActuarial@central-bank.org.tt. Please be guided accordingly. Yours sincerely Patrick Solomon INSPECTOR OF FINANCIAL INSTITUTIONS Cen t r al Ban k o f Tri n i d ad an d To bag o Eric Williams Plaza, Independence Square, Port-of-Spain, Trinidad, Trinidad and Tobago Postal Address: P.O. Box 1250 Telephone: (868) 621-CBTT (2288), 235-CBTT (2288); Fax: (868) 612-6396 E-Mail Address: info@central-bank.org.tt Website: www.central-bank.org.tt