Regulators should require regular, structured and ongoing dialogue between the competent authorities supervising insurers and the internal auditors working in them, the ECIIA has said in response to recent consultation by EIOPA (European Insurance and Occupational Pensions Authority).
That is because internal audit is well-placed to provide an independent opinion about the internal controls, risk management and governance of the companies concerned. Almost 8 out of 10 auditors in Europe say they follow the three Lines of Defense Model at some level, which enables them to provide objective assurance to their organisations.
“While internal audit’s main line of accountability is to the Audit Committee, it also shares information with the statutory auditors and the regulators,” ECIIA President Henrik Stein said. “Clear and effective communication between all these parties is vital in order to avoid duplication, or gaps, in the overall assurance picture,” he added.
Stein said he would welcome the opportunity to meet with senior EIOPA officials to discuss in more detail the role of internal audit in this area.
Read the ECIIA’s response here.