ICICI Bank 2012 Annual Report Download - page 200

F122
BASEL II – PILLAR 3 DISCLOSURES (CONSOLIDATED)
The Investment Risk Committee assists the ERC in identification, measurement, monitoring and control of market,
liquidity and credit risks. This includes asset liability management through regular monitoring of the equity backing
ratios and asset liability duration mismatch. The Company has a liquidity contingency plan in place. The Insurance Risk
Committee assists the ERC in identification, measurement, monitoring and control of insurance risks i.e. persistency,
mortality, morbidity and expense risks.
The Operational Risk Committee assists the ERC in identification, measurement, monitoring and control of operational
risks i.e. risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events.
The Outsourcing Committee reports to the ERC on management of outsourcing risk i.e. risk due to using the services of
a third party to perform activities on a continuous basis that would have been normally undertaken by the Company.
The risk management model of the Company comprises a four stage continuous cycle, namely identification and
assessment, measurement, monitoring and control of risks. The Company’s Risk Policies detail the strategy and
procedures adopted to follow the risk management cycle at the enterprise level. A risk report detailing the key risk
exposures faced by the Company and mitigation measures is placed before the BRMC on a periodic basis.
16. RISK MANAGEMENT FRAMEWORK OF ICICI LOMBARD GENERAL INSURANCE COMPANY LIMITED
The objective of the Risk Management Framework of the Company is to ensure that various risks are identified, measured,
mitigated and that policies, procedures and standards are established to address these risks for systemic response and
adherence.
The Company has identified enterprise wide risks, which are categorized under 5 broad categories viz. Credit Risk,
Market Risk, Underwriting Risk, Operational Risk and Strategic Risk. The broad structure of the framework is as follows:
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As part of the Enterprises Risk Management exercise, critical risks along with the detailed mitigation plan are presented
to the Risk Committee. The risk mitigation plans are monitored regularly by the Company to ensure their timely and
appropriate execution. A Risk Register is maintained to capture inventory of risks that the Company is exposed to along
with mitigation and corrective action plans. The Risk Committee is updated on the progress on a quarterly basis.
The senior management of the Company is responsible for periodic review of the risk management process to ensure
that the process initiatives are aligned to the desired objectives. The Management Reassurance Function is responsible
for review of risk management processes within the Company and for the review of self-assessments of risk management
activities. Further, compliance testing is done on a periodic basis and the Risk Committee is kept appraised of the
outcome of the same.
The Company’s reinsurance program defines the retention limit for various classes of products. Further, the Company
has in place a retention reinsurance philosophy, which defines the product-wise retention limits on a per-risk basis as
well as a retention limit on a per-event basis. The Underwriting Policy defines product-wise approval limits for various
underwriters. The Investment Policy lays down the asset allocation strategy to ensure financial liquidity, security and
diversification. The Company also has in place a Capital Adequacy and Liquidity Management Framework and an Asset
Liability Management Policy. These policies ensure maintenance of adequate level of capital at all times to meet diverse
risk related to market and operations.
Stress testing is conducted on a periodic basis to identify and quantify the overall impact of different stress scenarios on
the Company’s financial position. These tests do not predict what will happen, but are useful for examining what might
happen.
The Risks Management Framework of the Company is overseen by the Risk Committee of the Board. The Company has
a Chief Risk Officer who is responsible for the implementation and monitoring of the framework.
17. RISK MANAGEMENT FRAMEWORK OF ICICI SECURITIES LIMITED
The Board of Directors of ICICI Securities has constituted a Risk Management Committee for identifying and assessing
risks, framing risk management policies and methodologies, ensuring compliance of the same, managing various risks,
analysing and monitoring various products/processes/policies from an operational risk perspective and suggesting risk
controls to ensure that the residual risk of various business activities is within tolerable limits. The Risk Management
Committee meets at least once in a quarter.
The risk management function in the Company is performed by the Internal Controls team within the broad framework
as contained in the Corporate Risk and Investment Policy (CRIP). The CRIP is approved by the RMC. The Corporate Risk
at March 31, 2012