ING Direct 2011 Annual Report Download - page 253

Risk management continued
ING Insurance Eurasia
Board level risk oversight
ING Insurance Eurasia has a two-tier board structure consisting of the Management Board Insurance Eurasia (MBI Eurasia) and the
Supervisory Board Insurance Eurasia.
The Supervisory Board is responsible for supervising the policy of the MBI Eurasia and the general course of affairs of the company and its
businesses. For Risk Management purposes the Supervisory Board is assisted by two sub-committees:
• The Audit Committee assists the Supervisory Board in supervising and advising the MBI Eurasia with respect to the structure and
operation of internal risk management and control systems, as well as compliance with legislation and regulations applicable to ING
Insurance Eurasia and its subsidiaries;
• The Risk Committee assists the Supervisory Board in supervising and advising the MBI Eurasia with respect to ING Eurasia’s strategy and
its risk policies, including the risks inherent in its business activities.
To the extent that the committees do not determine otherwise, the Chief Risk Officer (CRO) attends the meetings of both committees.
The MBI Eurasia is responsible for managing the risks associated with the activities of ING Insurance Eurasia. The MBI Eurasia’s
responsibilities include ensuring the risk management and control systems are effective and ING Insurance Eurasia complies with legislation
and regulations. The MBI Eurasia reports and discusses these topics on a regular basis with the Supervisory Board, and reports to the Risk
Committee on a quarterly basis on ING Insurance Eurasia’s risk profile versus its risk appetite.
As part of the integration of risk management into the strategic planning process, the MBI Eurasia annually issues a Planning Letter which
provides the organisation with the corporate strategic planning, and addresses key risk issues. Based on this letter the business lines
develop their own business plans, including qualitative and quantitative assessment of the risks involved. Risk appetite, risk tolerance levels
and risk limits are explicitly discussed as part of the process. Based on the business plans the MBI Eurasia formulates the Strategic plan
which is submitted to the Supervisory Board for approval.
Executive Level
The MBI Eurasia has delegated tasks to two committees with regards to risk:
• Finance and Risk Committee
The primary responsibility of the committee is to align finance and risk decisions that have an impact on internal and/or external
reporting of ING Insurance Eurasia. This includes advising on, (pre-)approving, reviewing and taking actions on issues that impact the
financial condition of ING Insurance Eurasia. The Finance and Risk committee has two sub-committees dealing with different risk areas:
– Eurasia Model Committee – The authority that approves methodologies, models and parameters used for measuring Risk, Economic
Capital and Market –Consistent Valuations which are applied within ING Insurance Eurasia.
– Impairment Committee – The authority where impairments for financial reporting purposes are approved (including loan loss provisions).
• Risk Committee MBI Eurasia
The Risk Committee MBI Eurasia includes all MBI Eurasia members and heads of finance & risk staff departments. It discusses and
decides on risk related items, approving limits and tolerance levels per risk category and approving and mandating action plans for
specific financial, product and operational risk issues. The Risk Committee MBI Eurasia has three sub-committees dealing with different
risk areas:
– Financial Risk Committee – Oversees all financial risks within the ING Insurance Eurasia entities
– Product Risk Committee – Oversees all insurance product risks within the ING Insurance Eurasia entities
– Non-Financial Risk Committee – Oversees all non-financial risks within ING Insurance Eurasia
Risk Management Function
The CRO bears primary and overall responsibility for the risk management function within ING Insurance Eurasia, which identifies,
measures, monitors and reports risk within ING Insurance Eurasia. The risk function maintains and updates the policy framework, develops
risk methodologies and advises on the risk tolerance and risk profile. The CRO assures that both the Supervisory Board and MBI Eurasia are
well informed and understand the material risks within ING Insurance Eurasia at all times.
The CRO delegates day-to-day Risk Management within ING Insurance Eurasia to the Deputy CRO. The Deputy CRO department consists
of several risk functions that support the overall Risk Management function.
1 Who we are 2 Report of the Executive Board 3 Corporate governance 4 Consolidated annual accounts 5 Parent company annual accounts 6 Other information 7 Additional information
251ING Group Annual Report 2011