Strengthening individual accountability in insurance: responses to CP26/14, CP7/15 and CP13/15

Policy Statement 22/15

Published on 13 August 2015

Overview

This policy statement (PS) provides feedback to responses to:

those aspects of CP26/14, 'Senior insurance managers regime: a new regulatory framework for individuals' that were not considered in PS3/15 'Strengthening individual accountability in banking and insurance - responses to CP13/15 and CP26/14'
the proposals in CP7/15, 'Approach to non-executive directors in banking and Solvency II firms & Application of the presumption of responsibility to Senior Managers in banking firms' in relation to Solvency II firms; and
CP13/15 'Changes to the Approved Persons Regime for Solvency II firms: forms, consequential changes and transitional arrangements'.

This PS is relevant to UK insurance firms that are subject to the Solvency II Directive, third country branch undertakings, the Society of Lloyd's and managing agents ('Solvency II firms').

It sets out further final PRA rules (in addition to those published in PS3/15) to implement the Senior Insurance Managers Regime (SIMR) for Solvency II firms. Published alongside this PS is Supervisory Statement 35/15 that sets out the PRA's expectations of firms in relation to the new regime. The individual chapters for this supervisory statement were consulted on in CP26/14 and CP7/15.

The rules in this PS extend the basic requirement to require a reference from former employers to also cover current or former non-executive director (NED) roles. However, the PS does not contain further substantive rules on the regulatory references to be issued by a current or former employer when a firm is considering appointing a person to a Senior Insurance Manager or NED role. On 10 June 2015, the Fair and Effective Markets Review (FEMR) issued recommendations about the form and content of such references. It is expected that the PRA's proposals as consulted on in CP26/14 would need to be revised in order to implement the FEMR recommendations, and the PRA therefore expects to issue a further consultation later in 2015. The PRA's final rules on references will be made before the commencement of the SIMR on 7 March 2016.

Readers may also find it useful to refer to the FCA’s website, in particular the FCA’s policy statement PS15/21 ‘Changes to the Approved Persons Regime for Solvency II firms’.

Policy Statement 22/15