CONCEPTUAL PRINCIPLES OF INTERNAL CONTROL IN THE STRUCTURE OF CORPORATE GOVERNANCE OF AN INSURANCE COMPANY

Abstract

This article examines the conceptual foundations of integrating internal control systems into the corporate governance frameworks of insurance companies. Effective governance necessitates a structured, transparent, and risk-oriented control environment to ensure informational reliability, regulatory adherence, and ethical conduct. Within the insurance sector, internal control is vital for mitigating potential conflicts of interest between shareholders, policyholders, and management. By aligning with international principles and supervisory expectations, insurers can identify systemic violations at an early stage, ensuring business continuity and maintaining stakeholder trust. Particular attention is paid to the role of governing bodies, such as the Supervisory and Management Boards, in shaping control architecture and ensuring accountability across all organizational levels.
The research highlights the "three lines of defense" model as a fundamental methodological basis for distributing control functions and preventing gaps in responsibility. It identifies practical implementation challenges, including silo mentalities, resource limitations, and the absence of a unified risk culture. The study emphasizes that successful functioning requires three critical conditions: a strong "Tone from the Top," the integration of control objectives into performance metrics (KPIs), and a cooperative corporate culture. An integrated architectural model is proposed, combining strategic and operational elements to optimize governance and improve interactions between risk management, compliance, and internal audit.
Ultimately, the study contributes to enhancing the organizational and functional structures of insurers in accordance with modern supervisory requirements. Strengthening these mechanisms reduces operational and reputational risks, thereby increasing the overall stability of the insurance market.