Corporate Governance

Chesnara maintains a business continuity plan (BCP) that makes sure recovery and continuity of all critical services will be achieved within an acceptable time frame.

The plan is regularly reviewed and tested at least once a year.

The Group has no appetite for any critical business services being unavailable in each of its business units beyond what local management consider acceptable.

Cyber risk means any risk of financial loss, disruption or reputational damage to customers or any part of the Group as a result of our information technology systems. This includes digital technologies, devices and media. Responsibility for cyber risk extends beyond the IT team and preventing any risk is a Group concern.

The Company has an Information Security Policy Framework that features policies on all topics relevant to protecting and keeping safe the Company and UK based employees’ information and IT assets. This includes the legal requirements of the General Data Protection Regulation (GDPR) and the Data Protection Act 2018, introduced in May 2018.

Personally identifiable information is only collected where it is specifically and knowingly provided. However, our web server does collect basic information, such as the visitor’s internet service provider's domain name and the pages accessed and when, during a visit to the site. This information is used to analyse the use of our website to help guide improvements.

The Group does not accept poor data quality as a reason for a material misstatement of financial or non-financial information to customers, shareholders, regulators or public bodies. The approach to data quality complies with all relevant regulation, including data sourced and managed both internally and through our Outsourced Service Providers.

The Company has an Information Security Policy Framework that features policies on all topics relevant to data security, protecting against any material loss of and/or unauthorised or illegal access to confidential personal or business data.

Chesnara has no tolerance for bribery, fraud or corruption. The controls in place include the:

• maintenance and review of a Gifts & Hospitality Register
• disallowance of any political contributions or inducements
• careful consideration of any charitable donations
• monitoring of company assets, accounts and statements.

Internal financial control acts as a further monitoring and prevention system.

Chesnara maintains a business continuity plan (BCP) that makes sure recovery and continuity of all critical services will be achieved within an acceptable time frame.

The plan is regularly reviewed and tested at least once a year.

The Group has no appetite for any critical business services being unavailable in each of its business units beyond what local management consider acceptable.

All communication is seen as important and effective communication plays a very positive role in the day-to-day operations of the Group.

The Group has policies and procedures for managing general, external and internal communications. They form part of the Group’s strategic and business planning and reflect the Chesnara’s brand identity and standards. The core aim is to provide timely, clear, transparent, accurate and objective information that meets the need of all our audiences, including our statutory responsibility to provide information.

The Group aims to be aware of and sensitive to the needs of the environments and the local communities across all business sites, our employees, investors and regulators. Our policies follow the relevant regulation and legislation, and support the Group’s efforts to improve our environmental performance.

Our people are our greatest asset. We recognise that to meet our own expectations in a competitive market, we need to continue attracting, promoting and retaining the best candidates. Our approach is to be open, entrepreneurial and inclusive in how we operate.

Chesnara is committed to a policy of equal opportunity in employment. We will continue to select, recruit, train and promote the best candidates available. Selection is based on suitability for the role and treats all employees and applicants fairly, regardless of race, age, gender, marital status, ethnic origin, religious beliefs, sexual orientation or disability. Chesnara will ensure that no employee suffers harassment or intimidation.

Chesnara places great importance on the health, safety and welfare of its employees. Relevant policies, standards and procedures are reviewed on a regular basis. This ensures that any hazards or material risks are removed or reduced to minimise or, where possible, exclude the possibility of accident or injury to employees or visitors.

An Internal Audit function exists within the Group’s business units in line with the nature, scale and complexity of each business.

Every unit has its own audit plan, which is used to examine and evaluate the appropriateness and effectiveness of systems, internal control mechanisms and arrangements.

The Modern Slavery Act 2015 (Slavery Act) requires a commercial organisation over a certain size to publish a slavery and human trafficking statement for each financial year. This statement can be found on the Chesnara plc website. Chesnara welcomes the act and is committed to the eradication of human trafficking and slavery. Slavery and human trafficking are abuses of a person’s freedom and rights. We are totally opposed to such abuses in our direct operations, our indirect operations and our supply chain as a whole.

Chesnara has in place whistle-blowing policies, which comply with local regulatory requirements. In the UK, the Audit & Risk Committee Chairman is appointed as Whistle-blowing Champion.

Chesnara is required to provide a range of financial reports as prescribed by the Companies Act 2006, Listing Rules, Disclosure and Transparency Directive and the UK Corporate Governance Code. The Company has a Reporting and Disclosure Policy outlining the reporting and disclosure requirements, including those of Solvency II and the International Financial Reporting Standards (IFRS).

All Group companies comply with all relevant statutory and regulatory requirements to prevent Money Laundering activities. Each division has an Anti-Money Laundering Policy signed off by their Board, which includes a clear allocation of responsibility and accountability for Money Laundering controls and audit trail.

The group aims to make profits by running insurance businesses rather than through investment in the market. Managing these insurance businesses and any surplus funds sees the application of an investment strategy underpinned by appropriate principles.

The Group aims to minimise the risk of not being able to meet its outgoings, be it to policyholders or other creditors. To meet this risk appetite, minimum levels of liquid assets are established across the group and must be adhered to.

The Group outsources business services and support activities when appropriate. The relevant Board is regularly updated on supplier performance in material contracts.

A core outsourcing principle is the selection criteria for outsourcing business. Selection is based on financial standing and management and evidence of controls designed to minimise the impact of an outsource provider failing to meet its obligations or quality service standard.

When considering the financial position of the company, any appropriate allowance is required for likely cost of future payments to policyholders and for the costs of running the business, leading to the holding of reserves. The nature of insurance means these future costs have an inherent uncertainty within them, so the Group considers it important that suitable governance and controls are applied to these assessments, ensuring that all regulatory considerations are applied, group principles and practices followed, and appropriate oversight applied to challenge the resultant valuations.

Each regulated entity will have a suitably experienced actuary responsible for advising the relevant Board, which takes appropriate responsibility for the assumptions and methodology used.

The Company’s Finance Function is responsible for overseeing the valuation of the assets and liabilities held by Chesnara as outlined in the Assets and Liabilities Valuation Policy.

This policy addresses the requirements of:

• Directive 2009/138/EC (articles 41, 46 and 75)
• Delegated Acts (article 267)
• EIOPA 14-253 Final report on Governance (guidelines 52 to 59).

It provides a summary of the bases, methods and inputs used in asset and liability valuation for IFRS and Solvency II reporting, including assumptions and judgements concerning tax liabilities.

For solvency valuation purposes, the Group is required to value its assets at their market value. The vast majority of these assets are traded on stock exchanges and therefore the market value is determined with reference to quoted prices. For the minority of assets that are not traded on exchanges, the group uses valuation models that use inputs that can be observed in the market, for example longer term interest rates.