In September 2011 the Commission issued the Finance Sector Code of Corporate Governance. The introduction states that from 2012 we will require an assurance statement from companies subject to the Code, confirming that the directors have considered the effectiveness of their corporate governance practices and are satisfied with their degree of compliance with the Principles set out in the Code or the alternative codes accepted by the Commission.
The Commission has concluded that the Code has generally led to an increase in corporate governance standards within the finance sector. Consequently, the Commission has also concluded that, with the exceptions referred to below, the cost and effort for the sector in completing separate annual assurance statements outweighs the advantages of the statements. Therefore, for the time being, it will not routinely require separate assurance statements to be completed annually.
The Commission considers there is merit in new licensees (ie companies covered by the Code which are licensed after 31 July 2012) providing us with an assurance statement on the first anniversary of the date on which they are licensed. We will therefore continue to seek an assurance statement in these circumstances.
In addition, notwithstanding the foregoing, the Commission reserves the right to require any companies to continue to provide a statement annually if the circumstances so warrant.
We collect annual compliance returns for some but not all sectors. As part of our programme of consolidation and revision the Commission will be considering to what extent corporate governance assurance statements should routinely be provided annually by licensees. The requirement to provide assurance statements as part of the returns will be considered at that time.
It should be noted that insurers subject to the Licensed Insurers’ Corporate Governance Code (“the Insurers’ Code”) must continue to submit the summary of the extent of adherence to the corporate governance principles set out in the Insurers’ Code as required by the Insurance Business (Annual Return) Regulations, 2008.