CORPORATE GOVERNANCE IN INSURANCE COMPANIES

Corporate governance is the part of company law that governs the manage- ment and control of a company. In recent years, especially after the fi nancial crisis, corporate governance has become particularly important in fi nancial institutions, including insurance companies, and special rules of governance and control are increasingly applied to them. Serbian law has developed special rules on corporate governance in insurance companies under the strong infl uence of European regula- tions and numerous sources of soft law that recommend responsible and sustainable governance in insurance companies and strive to, in addition to achieving the classic goals of protecting the interests of the company, especially encourage the protection of the interests of users of insurance services and other stakeholders.

One of the most important aspects of corporate governance in insurance companies is the principles by which they conduct their business and act in the interests of the company and its shareholders, in order to protect the interests of users of insurance services. The rules governing the structure and composition of the governing bodies of insurance companies have been specifi cally regulated and improved in recent years. Under the infl uence of EU law, a complex management system has been developed in these companies, aimed at careful and conscientious management of the company’s aff airs. The key features of an eff ective management system are an adequate and transparent organisational structure with strict demarca- tion and division of responsibilities and an effi cient information transmission system.

In recent years, the prevailing view has been that the duty to act in the best interests of the insurer includes principles and standards of environmentally and socially responsible business. This means that, more than ever, the management is faced with the diffi cult task of implementing increasingly complex business rules and management systems. For this reason, it is necessary to further improve them and to specify the conditions that members of the management of companies in the fi nancial sector must fulfi l in order to have suffi cient knowledge and skills to understand and manage the risks of sustainable business.

Keywords: Corporate governance – Insurance companies – Duty of diligence – Duty to act in the best interest of the company – Sustainable business