A copy of this Circular must be passed to the Company’s Board of Directors, Audit Committee, Internal Auditors, Risk Management officers, Compliance Officer, Responsible Actuary and External Auditors.
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The Actuary must prepare a short summary document highlighting the key recommendations of the pricing report. This shall be submitted to the Board of Directors and the internal control functions (internal audit, risk management, and compliance functions) with the pricing report submission.
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The purpose of this document is to ensure that:
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| • | The internal control functions understand the Actuary’s recommendations. |
| • | There are internal controls in place to ensure the company is following the Actuary’s recommendations. |
| • | The internal control functions set up a meeting with the .Actuary to understand his/her recommendations and how to ensure that the company is following his/her recommendations.
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The compliance function must report to SAMA any material lack of compliance with SAMA’s instructions. This shall be based on the reports of the Internal Audit function and the Risk Management function, and shall include an action plan for addressing the key issues identified.
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The Internal Audit function must carry out a continuous audit, at least on a quarterly basis, of the underwriting function to assess compliance with the company’s internal procedures and guidelines as defined in the underwriting manual submitted to SAMA.
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The Risk Management function must carry out a quarterly assessment of the underwriting risks, and recommend improvements to processes, and address any other weaknesses that should be improved such as any need for additional training of underwriting staff.
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The internal control functions (internal audit, risk management, and compliance functions) must provide the Audit Committee on a quarterly basis with a report on their findings and suggested corrective actions. Moreover, on a quarterly basis the compliance function must provide SAMA with a copy of the minutes of the Audit Committee meeting in which the report was discussed. The minutes must summarize the findings and any corrective action that should be taken by the company.
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The Underwriting Authority Statements for Medical and Motor products must be formally approved by the Board of Directors within 60 days of the required submission dates of the actuarial pricing reports to SAMA.
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The Compliance Officer must ensure that all those mentioned in the first paragraph of this section receive copies of the Actuary’s Pricing Reports, the Board Summary documents and the Underwriting Manuals.
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In addition all members of staff who have a designated underwriting authority level must be passed copies of the Underwriting Manual by the Compliance Officer.
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The company must ensure that it has in place a central database accessible by Senior Management and all Internal Control functions containing full records of all quotations issued by the company, and all backing data.
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Companies are required to have a centralised quotations database in place by 1 July 2016.
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