a. A Risk M anagement Commit t ee t hat consist of at least t he majorit y of t he Board of Direct ors and
relevant execut ive off icers. b. A Risk M anagement Unit that must be independent
and shall be responsible direct ly t o t he M anaging Direct or or t o a specially assigned Direct or.
Banks are also required t o disclose t o t heir cust omers t he risk inherent in new product s and act ivit ies.
7. Applicat ion of Risk M anagement in Int ernet Banking
Banks providing internet banking services are required t o ensure eff ect ive applicat ion of risk management in
their internet banking activities, covering the follow ing: a. Active oversight by the Board of Commissioners and
Board of Direct ors b. Securit y cont rol syst em
c. Risk management w ith particular focus on legal risk and reput at ion risk.
Applicat ion of risk management shall be set out in a w rit t en policy, procedures, and guidelines f ormulat ed
w ith reference to the Guidelines for Application of Risk M anagement in Banking Services over t he Int ernet
issued by BI. To im p ro ve ef f ect iven ess in ap p licat io n o f r isk
management , banks are required t o conduct a regular evaluat ion and audit of int ernet banking act ivit ies.
8. Im p le m e n t a t io n o f Risk M a n a g e m e n t f o r Bancassurance
a. While doing bancassurance act ivit ies, Bank is not permit t ed t o undert ake, eit her alone or joint ly, t he
risk arising f rom insurance act ivit ies. b. Bank im plem ent ing bancassurance act ivit ies is
obligat ed t o im plem ent risk m anagem ent shall cover but not limit ed t o t he f ollow ing:
●
Appoint ment of insurance company t o become bank’s part ner;
●
Formulat ion of part nership agreement ;
101
●
Im p l em en t at i o n o f r u l es r eg ard i n g b an k conf ident ialit y; and
c. Ban k s is o b lig at ed t o m ak e a select io n o ver insurance companies w hich w ill become t he bank’s
part ner in bancassurance act ivit ies w it h at t ent ion paid t o t he f ollow ing mat t ers:
●
Insurance company eligible t o become a part ner is one t hat complies w it h t he minimum level of
solvabilit y according t o prevailing rules.
●
Th e in su r an ce co m p an y h as o b t ain ed t h e relevant license f rom t he M inist er of Finance t o
ru n b an cassu ran ce act ivit ies acco rd in g t h e prevailing rules
●
Ban k s o b lig at ed t o m o n it o r, an alyze, an d evaluat e perf orm ance and or reput at ion of
part ner insurance company periodically at least once a year.
d. Bank is obligat ed t o end t he part nership bef ore t he end of agreement period or may not ext end t he
period of part nership if :
●
Perf ormance of part ner insurance company no meet condit ions
●
There has been a decrease in reput at ion of part ner insurance com pany w it h signif icant
inf luence on banks’s risk prof ile. e. In t he event t hat t he market ed insurance is linked
t o in vest m en t in vest m en t lin k u n it lin k , Th e insurance company has complied w it h condit ions
st ipulat ed bay The M inist er of Finance, w hich, among others, are as follow s:
●
Availabilit y of an expert w hose qualif icat ions equal t o a deput y invest ment manager w it h at
least 3 year experience
●
Separat ion of asset s and obligat ion f rom ot her lif e insurance
●
Im plem ent at ion of ot her m at t ers required in managing t he invest ment f unds ent rust ed by
cu st o m er s o p t i m al l y, p r o f essi o n al l y, an d independent ly.
102
9. Applicat ion of Risk M anagement f or Banks Conducting Activities Related to M utual Funds
