4.1 Taking control
34. Taking control of the insurer is a critical step in the resolution process, as it is a
prerequisite for exercising many of the other resolution powers. The resolution authority’s
powers should not require, or be contingent on, the cooperation of the insurer or its
shareholders.
Take control and manage the insurer, or appoint an administrator or manager to do so
35. With this power, the resolution authority takes control of the insurer in resolution in
place of the insurers’ Board and shareholders, to direct its activities so the insurer can continue
to operate. This includes the management and disposal of the insurers’ assets and liabilities.
The resolution authority should have all of the powers of the insurer’s Board and Senior
Management, whose authority is suspended except as permitted by the resolution authority.
The resolution authority should also have the power to manage or discharge employees.
36. The resolution authority can exercise its control of the insurer in resolution directly or
through the appointment of one of more persons, including an administrator or manager. The
role of such appointment is to facilitate and implement necessary measures to achieve the
resolution objectives, at the direction of the resolution authority. The resolution authority, its
administrator or manager, should have authority to obtain any other professional services. The
compensation of an administrator, manager or others providing services would normally be
paid by the insurer unless otherwise specified in the particular jurisdiction.
37. Finally, the resolution authority should be able to take control of all of the insurer’s
property and authorised to deal with its property.
Override rights of shareholders of the insurer
38. This power is necessary to implement other resolution powers. Whilst the insurer is in
resolution, the voting rights attached to shares of the insurer are suspended. The resolution
authority should be able to act in accordance with its resolution objectives without the need to
obtain shareholder approval, so that the actions conducted by the resolution authority can be
implemented in a timely manner, consistent with the parameters provided to it under that
jurisdiction’s resolution regime.
Retain, remove, or replace Board members, Senior Management, Key Persons
39. The aim of replacing key decision makers is to ensure effective management of the
insurer during and post resolution.