The purposes of this Guideline are to ensure that (a) the Board of Directors and Senior Management of these institutions are fully cognizant of the need to adopt sound principles and practices for the internal governance of the institutions they oversee, and (b) institutions are aware of the factors considered by the Central Bank in assessing corporate governance practices.

This Guideline seeks to promote greater fairness and transparency between policyholders and insurers. Strong market conduct ethics serve to reduce mistrust that may exist between clients and insurers, and enhanced mutual confidence improves market efficiency. Conversely, weak market conduct ethics are usually the major reason for the poor development of an insurance market.