As a financial institution, L’Entraide Assruance must work
to earn, maintain and continually improve the confidence
entrusted in it by its members and insureds. To do this, it
must carry out its operations and activities efficiently and
ethically to ensure the decisions of the Executive and the
Board of Directors fully respect their rights. L’Entraide
Assurance has adopted many policies, programs and
procedures aimed at ensuring that legislation is
respected and the business practices recognized by the
insurance industry are followed.
Terms of reference of the board
The Board is responsible for the Company. It monitors
how the Company carries out its activities and supervises
upper management, which is responsible for daily
management concerns. The Board's role is to approve
the Company's strategic orientation, including its mission,
vision and values. The Board is also responsible for
managing or supervising the Company's business on a
regular basis to ensure its resources are used in such a
way as to protect the Company's assets, comply with the
laws and respect internal and commercial ethical
standards. It is also responsible for examining the risks
identified by the Executive along with the policies and
practices adopted by the Company in order to reduce
these risks.
In carrying out these functions, each director must act
with integrity and good faith in the best interest of the
Company and with the care, diligence and skill any
reasonable person would demonstrate in such
circumstances. This means directors must avoid placing
themselves in situations where their personal interests
could conflict or appear to conflict with the best interests
of the Company. The Board of Directors meets five times
a year.
Coposition of the board
The members of the Board provide L’Entraide Assurance
with a wide range of knowledge, expertise, skills and
know-how to guide the firm's strategy and operations.
L’Entraide Assurance's Board is composed of directors
who mostly have no connection with the firm.
Directors have a role as agents and fiduciary trustees of
the Company and are elected by simple majority vote of
the members during the Annual General Assembly. The
term of a director's seat is three years.
Expectations of the board regarding the executive
Responsibility for daily management of L’Entraide
Assurance is delegated to the Chairman and Chief
Executive Officer along with other executives. The
Chairman and CEO reports to and is accountable to the
Board. This person is charged with managing the
Company's strategic planning and operations and with
executing the guidelines and policies determined by the
Board.
The main principle of delegation calls for the directors to
retain ultimate authority over the Company. It is thus
essential that they ensure the Company's internal control
systems and management information are effective.
Board committees
The Board Committees enable the directors to share
responsibilities and devote the necessary resources to a
particular issue or field. Legislation requires that the
Board form audit and ethics committees. L’Entraide
Assurance's Board has set up two other committees:
the investment committee and the advisory committee.
Audit committee
The audit committee is composed primarily of external
directors, who meet four times a year. In conducting its
activities, the committee is entitled to examine the
Company's books, records and accounts and discuss
them and any other question on the firm's financial
situation with the Executive and auditors.
In practice, the audit committee's tasks extend well
beyond the statutory responsibilities, taking in
supervision of the Company's obligations related to
ongoing information, procedural follow-up and its
financial systems along with meetings with auditors to
review the Executive's financial management of the firm.
Ethics committee
The ethics committee meets at least once a year.
This committee must ensure that the required rules are
developed to apply the provisions of the law.
These rules deal with the Company's behaviour towards
people with an interest in it or connected to the directors
or the members of the Executive in terms of contract
conditions accorded to these people and the
confidentiality of information the insurer has on its
members and insureds.
Investment committee
The investment committee meets three times a year. Its
role is to review investment policies and standards. It also
evaluates that the Company is in compliance with
legislation, regulations and investment policies.
Advisors committee
The advisory committee, which meets as needed, advises
the Chairman and Chief Executive Officer on any issue he
may want to submit to it, whether this concerns matters
of organization, functions, acquisition, divestment,
strategy or financing.
This ad hoc committee meets when required, at the
request of the Chairman and Chief Executive Officer.
It can provide comments, opinions and advice on the
issues the Chairman and Chief Executive Officer submits
for its consideration.
Compensation and liability insurance for directors
In agreeing to act as directors, members of the Board
take on important obligations. Potential candidates will
continue to accept terms as directors if they are certain
they can reduce their personal risk exposure to a minimum.
To this end, L’Entraide Assurance has reached a
compensation agreement with each of the directors and
members of the Executive. The Company feels it is
preferable to commit to compensation in an agreement
since, unlike a resolution or a rule the Board can modify,
a contract requires the consent of the parties for
modification.
The Company has also contracted for civil liability
insurance for its directors and executives. This is in
addition to L’Entraide Assurance's agreement regarding
compensation and to the global insurance program of
the Company.
