The ERM Committee has compiled the below checklist for companies outlining some considerations in light of the Covid-19 pandemic. This is not an exhaustive list and there may be additional items not included on the list which are material to individual companies.

1. Operational

1.1 Firms should consider whether this pandemic is a disrupter to current business structures and distribution models.
1.2 Does your investment management strategy require any changes?
1.3 What impact do you expect Covid-19 to have on key outsourcing providers or other third parties, and their ability to withstand this?
1.4 Companies may need to anticipate reductions in productivity and other capabilities e.g. remote system bandwidth.
1.5 Companies should continue to monitor remote working arrangements to ensure they are working. Do processes remain controlled sufficiently e.g. financial crime requirements and quality assurance? Management information in this area will become even more important.
1.6 Staff morale – are staff motivated and productive? Do they remain conscious of the needs of the end customer and could there also be an impact on conduct risk and ability to service customers in line with contractual commitments? Does your company remain adherent to the Consumer Protection Code and any charters around vulnerable customers? Is the culture of the business tested?
1.7 Have appropriate steps been taken to protect customer’s personal information with staff working from home?
1.8 Is the company susceptible to cyber-crime given the change in business practices?
1.9 How are requirements regarding Board and committee meetings being met in terms of attendance (physical or otherwise)?
1.10 Companies may need to assess key person risk and contingency planning in that regard.
1.11 Firms may need to review their operational resilience.
1.12 Operational risk management processes may require review (due to significant and sudden shift to remote working).
1.13 Have you considered a transition plan once restrictions have been lifted?
1.14 Firms should consider how the current environment impacts on claims handling processes e.g. impact on reporting delays.


2. Monitoring & Solvency

2.1 Is the current level of monitoring in respect of the solvency position adequate or is additional monitoring required? This will depend on a number of factors, including whether buffers have been designed to do full calculations less frequently.

Is continuous compliance with capital requirements in danger, especially given recent market movements?

2.3 Additional stress and scenario testing will likely be needed for Covid-19, and could include a refresh of operational risk scenarios and assessing the impact over the short, medium and long term including second wave attacks. Economic scenarios, including further market falls and a low growth environment, could also be performed and linked to the ORSA review and review of business plans.
2.4 Have appropriate steps been taken to protect against potential asset downgrades/defaults?
2.5 An overall review of the 3-5 year business plan may be considered.
2.6 Companies should consider the level of group monitoring and overall group response to the pandemic.
2.7 What ability does your company have to access additional capital as the need arises?
2.8 What management actions are open to you and have the effect of any of these been diminished by recent events e.g. market falls?
2.9 Has there been any changes to the credit rating of shareholder assets (particularly Corporate Bonds or portfolios backing annuities and other non-linked liabilities), or changes to any internal assessments or watchlists?
2.10 Has there been any change in the credit rating of your material reinsurers?
2.11 Has Covid-19 triggered the requirement for an out of cycle ORSA for your company?
2.12 Companies should review business continuity plans and assess any weaknesses in the current environment.
2.13 Firms may also need to assess the appropriateness of the standard formula (and perhaps their internal models) in light of the pandemic.
2.14 Has your liquidity requirements or liquidity risk profile changed as a result of Covid-19? Companies should be taking inventory on sources of liquidity they have access to and how they would access that liquidity.  They should also be considering what actions they might undertake to increase liquidity, and the implications of those actions. 
2.15 Consideration should be given to the reputational impacts in terms of application of policy wording.


3. Business & Financials

3.1 For unit linked business, do you expect for there to be an increase in switches or encashments/surrenders? Are unit linked ALM processes working sufficiently well? Is the shareholder exposed through sudden market movements and backlogs? Can high level estimates be temporarily utilised to mitigate these risks?
3.2 What level of claims activity do you expect from Covid-19 and do you have the necessary resources to cope with that exposure?
3.3 For companies offering property funds, are these stable enough to be valued and liquid enough to remain open to flows in the current environment?

What impact do you expect for Covid-19 to have on the following (noting that significant changes should be reflected in the business plan):

·        Business volumes;

·        Expenses; and

·        Profit levels?

3.5 What adjustments may need to be made to future underwriting and pricing?
3.6 Do valuation assumptions need to reflect the current reality in some way in the short and medium term?

Firms will need to assess whether or not they need to hold explicit reserves/provisions for Covid-19 in their Q1 regulatory submission.

3.8 Do you expect there to be an impact on claims and underwriting practices e.g. difficulty in securing medical evidence, and how this will be addressed?
3.9 Do you expect for there to be an impact on profitability through a shift in distribution channels i.e. more online?
3.10 Are certain products or sales channels at increased risk of anti-selection?
3.11 Firms should consider the impact any changes in claims handling processes arising from the pandemic, including potential reporting delays, have on the actuarial claims reserving process/models.
3.12 Firms should consider the EIOPA statement on dividend distribution and variable remuneration policies in the context of COVID-19 -
3.13 Firms should assess the coverage response across various lines of business e.g. business interruption, cyber, workers’ compensation, event cancellation, income protection, credit lines etc. The assessments will need to be performed at a granular level given the potential favorable and adverse impacts across different lines of business depending on the coverage and wording in place.
3.14 Firms should consider if there are any gaps in reinsurance coverage/wording.