The role of internal financial control in preventing financial and operational risks ininsurance companies [Articol]

Abstract

Purpose of the article: The paper aims to analyze the role of internal financial control systems in insurance companies, with a focus on their capacity to prevent financial and operational risks. In the context of increasing market complexity and stricter regulatory requirements (including Solvency II), the study seeks to highlight best practices and identify existing gaps in the implementation of internal controls. Methodology: The research employs a mix of qualitative and quantitative methods: documentary analysis of the regulatory framework and specialized literature; case studies on a sample of insurance companies in the Republic of Moldova and Romania; surveys and interviews with insurance experts and internal auditors; and comparative analysis of implemented control mechanisms. Conclusion: indicate that robust internal financial control systems significantly reduce exposure to financial risks(fraud, accounting errors, misreporting) and operational risks (IT deficiencies, inefficient management, non-compliance with procedures). The maturity level of internal control systems varies considerably between large, internationally integrated companies and small or medium-sized insurers, which only partially apply international standards. The study also reveals that the adoption of digital tools and transparent reporting frameworks enhances not only financial stability but also customer trust. Originality: The originality of the paper lies in its regional comparative perspective, correlating internal financial control with the performance and resilience of insurance companies, while providing recommendations for alignment with European and international best practices. The scientific contribution consists in emphasizing how internal financial control can be transformed from a compliance mechanism into a strategic tool for risk management and competitiveness.