Article 271 Internal audit function

1.

2.

(a)

this is appropriate with respect to the nature, scale and complexity of the risks inherent in the undertaking's business;

(b)

no conflict of interest arises for the persons carrying out the internal audit function;

(c)

the costs of maintaining persons for the internal audit function that do not carry out other key functions would impose costs on the undertaking that would be disproportionate with respect to the total administrative expenses.

3.

(a)

establish, implement and maintain an audit plan setting out the audit work to be undertaken in the upcoming years, taking into account all activities and the complete system of governance of the insurance or reinsurance undertaking;

(b)

take a risk-based approach in deciding its priorities;

(c)

report the audit plan to the administrative, management or supervisory body;

(d)

issue recommendations based on the result of work carried out in accordance with point (a) and submit a written report on its findings and recommendations to the administrative, management or supervisory body on at least an annual basis;

(e)

verifying compliance with the decisions taken by the administrative, management or supervisory body on the basis of those recommendations referred to in point (d).