Governance and risk management

Board of Directors and Executive Management

Governance and risk management

Swiss Re’s 2018 Financial Report describes the governance and risk management framework for the Group and its legal entities. For more information, please refer to the Group governance and risk management section. This information also applies to SRLC Re, with the following deviations to mention:

SRLC Re, a subsidiary of SRLC, is a Swiss-regulated entity that is authorised by FINMA to write reinsurance. It acts as an internal risk pooling vehicle, optimising the capital base of the Life Capital Business Unit by reinsuring risks from across the business segment, providing capital support for new business and contains the Admin Re US closed-book business.

All risk-related activities of SRLC Re are subject to Swiss Re’s risk management framework. SRLC Re is subject to the corporate governance and risk governance requirements of a Level I entity. These include clear separation of management and Board supervision, mandatory representation of external directors and governance documentation to establish the roles and responsibilities of SRLC Re’s governing bodies. In addition, SRLC Re fully adopt Swiss Re’s risk management principles, including roles for delegated risk-taking and oversight, as well as risk culture and behaviour. Moreover, risk management activities at SRLC Re are complemented by Swiss Re’s Group Internal Audit and Compliance units.

As an exception to Level I governance requirements (due to the current size of SRLC Re), the Group Chairman’s & Governance Committee has waived the requirement to establish Audit and Finance & Risk Committees at Board level. Instead, the considerations and obligations normally performed by the Audit or Finance & Risk Committees are assumed by the Board.

SRLC Re has set out its risk governance, responsibilities, risk appetite and risk limits in SRLC Re’s Risk Management Standards. These standards are reviewed annually or in the event of a significant change in the business structure or governance arrangements of SRLC Re. They have been issued by SRLC Re’s Board as an addendum to the Group and SRLC risk management documents, which the Board of SRLC Re has reviewed and endorsed for use within SRLC Re.

SRLC Re fully adopts Swiss Re’s risk control framework, which has been reviewed and endorsed for use by the Board for use at legal entity level. To meet some of the requirements within the framework, SRLC Re leverages synergies with other Group Risk Management functions.

SRLC Re Risk Management’s participation in the planning process is described in SRLC Re Risk Management Standards as well as in the Group Risk Management Standards. In particular, SRLC Re Risk Management performs a risk review on any prospective intra-group transactions from both a quantitative and qualitative perspective. In addition, SRLC Re receives certain support services from other Group Risk Management functions for certain tasks in its risk oversight of planning.

SRLC Re makes use of Swiss Re’s internal risk model and follows the Group Risk Management Standards, Group Risk Category Standards and model-related standards in their approach to integrated risk measurement, including model development and governance.

The production of integrated risk measurement calculations is performed by Group Risk Management functions under the responsibility of the SRLC Re Chief Risk Officer, including calculations required for SST reporting as well as for business planning and calculating compliance with legal entity risk appetite and limits. At the same time, the Chief Risk Officer of SRLC Re retains the responsibility for reviewing, challenging and signing off integrated risk calculations before they are reported to SRLC Re’s Executive Committee and Board as well as to FINMA.

SRLC Re fully adopts the Group's approaches to risk exposure control through capital adequacy, liquidity adequacy and risk capacity limits.

Regular risk reporting is produced by SRLC Re based on the outcomes of other risk control processes. Regular risk reports are produced for SRLC Re’s Executive Committee and the Board which cover all material risk exposures of SRLC Re, these include risks contained within the regulatory capital requirements as well as risks that use different metrics (eg liquidity), are assessed qualitatively or are managed through the internal control system (eg operational).