2007年-世界发展银行全球_Slovenia___Pilot_Diagnostic_Review_of_Governance_of_the_Insurance_Sector_56页_537kb

Summary of the Pilot Diagnostic Review of Governance of the Insurance Sector in Slovenia

Core Content

This report is a diagnostic review of the governance of the insurance sector in Slovenia, conducted by the World Bank at the request of the Ministry of Finance. It is part of a broader initiative to evaluate corporate governance in key financial sectors, including banking and collective investment funds, and is the second such review in the Europe and Central Asia region after the Czech Republic. The review aims to improve the understanding of good corporate governance practices in the insurance sector, assess the current state of governance in Slovenia, and provide recommendations for enhancement.

Main Objectives

The report has three main objectives:

1. Improve the description of good governance practices in the insurance sector.
2. Conduct a diagnostic review of Slovenian insurance governance against these standards.
3. Provide recommendations to further strengthen corporate governance in the Slovenian insurance sector.

Key Findings

Ownership Structure & Transparency

• Governance in Slovenia has improved in terms of transparency and disclosure of financial information.
• However, there are weaknesses in the ownership structure, particularly due to government control over almost 60% of the sector, including three of the five largest insurance companies.
• This government ownership may hinder the development of more independent and transparent corporate structures.

Supervisory Boards

• Supervisory boards are not sufficiently effective in enforcing governance standards.
• There is a need for stronger accountability and the establishment of internal committees such as audit committees, as outlined in the new Companies Act.

Risk Management

• Risk management processes in insurance companies are outdated.
• There is a need for more robust risk management functions that ensure periodic reporting and contingency planning.

Insurance Supervision

• The current supervisory approach relies on inspection cycles rather than risk-based supervision.
• It fails to adequately supervise financial conglomerates on a consolidated basis, which is a critical requirement under the upcoming Solvency II regulations.

Key Recommendations

1. Government-controlled Companies

   • Consider selling government holdings, issuing an IPO for 10–25% of shares, and obtaining international credit ratings.

2. Strengthen Supervisory Boards

   • Enhance accountability and establish internal committees, such as audit committees, in accordance with the new Companies Act.

3. Improve Risk Management

   • Require all insurance companies to establish risk management functions that monitor, manage, and mitigate risks, with periodic reporting and contingency plans.

4. Adopt Risk-Based Supervision

   • The Insurance Supervisory Agency (ISA) should introduce consolidated risk-based methods of supervision in preparation for Solvency II.

5. Avoid Regulatory Arbitrage

   • Financial regulators should ensure consistent supervision and prevent opportunities for regulatory arbitrage.

Legal Foundations

• Corporate governance in Slovenia is primarily governed by the Insurance Act (2000, amended in 2002 and 2004) and supporting regulations issued by the ISA.

• The Companies Act provides a general legal framework, but the Insurance Act takes precedence where there are contradictions.

• Additional relevant laws include:

  • Compulsory Motor Third Party Liability Act (2002, 2005)
  • Health Care and Health Insurance Act (2000, 2005)
  • Pension and Invalidity Insurance Act (2000)
  • Act on Financial Conglomerates (2006)
  • Financial Operations of Companies Act (1999)

• The Managers’ Association of Slovenia (MAS) has developed a voluntary Code of Corporate Governance for commercial enterprises, but no specific code for the insurance sector has been established yet.

Sector Overview

• The Slovenian insurance sector has seen substantial growth in recent years, though it remains weaker than in other EU member states like Germany.
• Table 1 compares insurance penetration and density in Slovenia with Germany over the years 2000–2005, showing a steady increase.
• Table 2 provides a comparative analysis with the European Union, indicating that Slovenia lags behind in terms of premium income as a percentage of GDP, per capita premium income, and average premium per company and employee.
• The sector is becoming a significant player in the capital market, with life insurance and pension products playing a key role in long-term savings.

Importance of Corporate Governance

• Corporate governance is crucial in the insurance sector to ensure that management and directors act in the best interest of stakeholders, including policyholders, creditors, and minority shareholders.
• It ensures that companies have sound internal controls, risk management systems, and transparent financial reporting.
• Strong governance helps to prevent abuse, fraud, and mismanagement, especially in life insurance where long-term obligations are significant.
• The IAIS Core Principles emphasize the importance of a clear separation between the supervisory board and senior management, and the need for independent risk management functions.

Conclusion

• Slovenia is at a critical stage in the development of its insurance sector, where the government has a responsibility to ensure high standards of corporate governance and risk management.
• The upcoming Solvency II regulations will require a shift to a more consolidated and risk-based supervisory approach.
• Strengthening corporate governance in the insurance sector is essential to prepare for increased competition and regulatory requirements from the EU and globally.
• The report serves as a guide for policymakers and regulators, offering a framework for good governance and a baseline for future reforms.