Question & AnswerQ&A (IC CIRCULAR LETTER NO. 31-2005)
The purpose of ICC Circular Letter No. 31-2005 is to issue the Code of Corporate Governance Principles and Leading Practices for adoption and compliance by all insurance companies and intermediaries authorized to do business in the Philippines.
All insurance companies and intermediaries authorized to do business in the Philippines are required to comply with the Code of Corporate Governance.
The key features include new definitions of the role of the board, the chairman, and the non-executive directors; a more rigorous procedure for the appointment of directors; the formal evaluation of the performance of the board and individual directors; and the inclusion of a Self-Assessment Questionnaire.
The Code redefines the role of the board of directors to ensure effective governance by clearly delineating their responsibilities in corporate oversight, strategic direction, and ensuring compliance with regulatory requirements.
The Code introduces a more rigorous procedure for the appointment of directors, which likely includes qualifications, screening, and formal approval processes to enhance accountability and competence in the board.
The formal evaluation aims to assess the effectiveness and contribution of the board as a whole and of individual directors to promote accountability, improve corporate governance, and enhance overall company performance.
The Self-Assessment Questionnaire is a tool for insurance companies and intermediaries to assess their compliance with the different principles of good governance outlined in the Code. It must be submitted to the Insurance Commission every semester.
It must be submitted within one month after each semester, i.e., twice a year.
The circular was issued by the Insurance Commissioner, acting under the authority granted by the Insurance Commission and applicable regulatory laws governing insurance companies in the Philippines.
The full text is available at the Office of the National Administrative Register, U.P. Law Complex, Diliman, Quezon City.