If an insurer is part of a holding company, insurer's ERM function should identify, quantify, and manage any risks to which the insurer may be exposed by transactions, or affiliation, with the holding company.
If systems to perform these functions are located at the common control and management level , the insurer should be able to demonstrate how those systems anticipate and mitigate or manage the risks to which affiliates expose the insurer.
This demonstration should include not only those risks that may result in direct financial loss to the insurer through transactional or common control ties, but also reputational risks where the loss of confidence in one member of the group may cause distress to insurance company.