Compliance Function
The compliance function is one of the four Solvency II key functions and monitors compliance with laws and regulatory requirements within an insurance undertaking.
Concept
The compliance function is one of the four key functions required of an insurance undertaking under Solvency II and is responsible for monitoring compliance with laws, regulatory requirements, and internal policies.
Responsibilities
Core responsibilities of the compliance function include advising management on compliance with regulatory requirements, assessing the possible impact of legal changes on the undertaking, identifying and assessing compliance risks, and reporting to management and the supervisory body on material compliance findings.
Organizational Setup
The compliance function must be organized independently of the operational business units and must have a direct reporting line to management; it is part of the effective governance system required under Solvency II, together with the risk management, actuarial, and internal audit functions.