(1) An insurance undertaking or reinsurance undertaking shall establish and maintain an effective system of governance which provides for sound and prudent management of the business carried on by it.

(2) The system of governance shall include at least -

(a) an adequate transparent organisational structure with a clear allocation and appropriate segregation of responsibilities,

(b) an effective system for ensuring the transmission of information, and

(c) compliance with the requirements laid down in Regulations 45 to 51.

(3) The system of governance shall be subject to regular internal review.

(4) The system of governance shall be proportionate to the nature, scale and complexity of the operations of the undertaking.

(5) The undertaking shall have written policies in place to cover at least risk management, internal control, internal audit and, where relevant, outsourcing and shall ensure that those policies are implemented.

(6) The undertaking shall review the policies at least annually.

(7) The policies and amendments of the policies (other than minor ones) shall be subject to prior approval by the board of directors.