Internal Audit in the Insurance Industry
Operating within a highly regulated market under the regulatory oversight of the Malta Financial Services Authority (MFSA), the insurance sector in Malta has recently undergone a notable boom in overall business due to the attractive framework that Malta enacted for various insurance business models.
In addition, a Maltese license facilitates business passporting to other EU jurisdictions and offers multiple logistical advantages.
The enacted Insurance Business Act (Chapter 403 of the Laws of Malta) specifically requires insurance and re-insurance undertakings to establish an internal audit function, thereby imposing an organisational set-up that includes the appointment of an independent and autonomous internal auditor.
Being a very specific sector, internal audit activities within the insurance industry have to be even more centred around the multitude of operational risks which the undertakings face on a continuous basis, having the onus to implement the most robust version of internal controls applicable to safeguard the long-term continuity of the business model implemented.
In outlining this, internal audit practitioners require the experience and specific knowledge in identifying and addressing the inherent risks which often linger around such an industry, designing comprehensive procedures to adequately test each auditable process identified and highlight practical recommendations which align with the established corporate strategies.
In comprehensively addressing their complex risk structures, insurance undertakings may look to fully outsource or partially co-source such a function to independent audit practitioners who may provide an overview of the risks involved whilst delineating the ideal internal control framework which may mitigate their effect on the undertakings’ operational fulcrum.
How can BDO Malta help?
BDO Malta can assist insurance companies through:
- full internal audit function outsourcing;
- internal audit function co-sourcing;
- external support of “in-house” internal audit functions; and
- specialised training on the internal audit function.
Get in touch with our Internal Audit Team: