Strengthen the Avoidance of Performance in Banking and Insurance Industry and Implement Double Management for Key Personnel

category:Finance
 Strengthen the Avoidance of Performance in Banking and Insurance Industry and Implement Double Management for Key Personnel


On the one hand, key personnel and relatives should evade the subordination of the same unit. That is to say, neither party shall hold the position that both parties are directly subordinate to the same management member or have a direct management relationship with their superiors and subordinates in the same unit, nor shall the unit in which one party is a management member engage in personnel, finance, supervision, internal control, internal audit, risk management, credit approval, investment decision-making, investment transactions, etc.

On the other hand, for those who are not in the same unit, but have direct business constraints or interests with their relatives, which affect the effectiveness of the internal control mechanism, they should also be avoided. In addition, key personnel should rotate according to the requirements, and the period of rotation should not exceed 7 years in principle; employees of national banking and insurance institutions should not, in principle, assume the principal responsibility of provincial and municipal branches where they grow up, and can apply for exemption under special circumstances.

The range of relatives mentioned above refers specifically to the relatives that key personnel should avoid, including spouses, lineal relatives, lineal relatives within three generations and close relatives. The relatives that ordinary employees should avoid include parents, spouses and their parents, children and spouses.

It is noteworthy that the Guiding Opinion specifically points out the requirement of avoidance of employment of relatives of supervisors. It is pointed out that if an employee has relatives working in the supervisory authority, the bank and insurance institution should rationally arrange the position and duties of the employee, avoid the relationship between the employee and his relatives, and avoid the situation affecting the fairness of supervision.

The above requirements are in line with the requirements of Measures for Evasion of Performance of Staff in the System of the CBRC (Trial Implementation) issued by the former CBRC in 2017. In terms of evasion of employment, spouses, parents, children and their spouses who work in banking financial institutions are prohibited from directly supervising their jobs.

Taking into account the wide variety of banking and insurance institutions and the different situations in different regions, the Guiding Opinions have appropriately strengthened the flexibility of the system. On the one hand, the rectification of the problem of stock evasion has been given a three-year transition period, requiring the institution to clean up the stock problem in principle by the end of 2022, and to report the situation and work plan to the supervisory authority within three months after the issuance of this guidance. On the other hand, if there are special circumstances that cannot be avoided as required, it is allowed to be exempted after examination and approval by the agency, but it is required to be made public in the unit where it belongs, and the authority for examination and approval shall be accepted at a higher level. At the same time, the information of exempted personnel should be reported quarterly to the headquarters of the agency and the supervisory body. The relevant person in charge of the Banking and Insurance Regulatory Commission said that the introduction of the Guiding Opinions aims to strengthen internal accountability and external supervision of performance avoidance, tighten the system fence, plug management loopholes, and promote strong disciplinary measures to take root in the banking and insurance industries. Source: Responsible Editor of Securities Times: Yang Qian_NF4425

In view of the fact that the situations of various types of bank insurance institutions and various regions vary greatly, the guiding opinions have appropriately strengthened the institutional flexibility. On the one hand, the rectification of the problem of stock evasion has been given a three-year transition period, requiring the institution to clean up the stock problem in principle by the end of 2022, and to report the situation and work plan to the supervisory authority within three months after the issuance of this guidance. On the other hand, if there are special circumstances that cannot be avoided according to the requirements, exemption is allowed after approval by the agency, but it is required to be publicized in the unit where it is located, and the approval authority shall be collected one level. At the same time, the information of exempted personnel should be reported quarterly to the headquarters of the agency and the supervisory body.

The relevant person in charge of the Banking and Insurance Regulatory Commission said that the introduction of the Guiding Opinions aims to strengthen internal accountability and external supervision of performance avoidance, tighten the system fence, plug management loopholes, and promote strong disciplinary measures to take root in the banking and insurance industries.