Published on 9 November 2018
Introduction
This Prudential Regulation Authority (PRA) policy statement (PS) provides feedback to responses to Consultation Paper (CP) 20/18 ‘Strengthening accountability: implementing the extension of the SM&CR to insurers (Part 2)’. It also provides the final set of rules for the implementation of the extension of the Senior Managers and Certification Regime (SM&CR, ‘the regime’) to insurers.
This PS is relevant to all Solvency II insurance firms (UK Solvency II firms, the Society of Lloyd’s and managing agents, and third country (re)insurance branches), and to insurance special purpose vehicles (ISPVs), large non-Directive firms (NDFs), small NDFs and Swiss general insurers.
This PS should be read in conjunction with PRA PS15/18 ‘Strengthening individual accountability in insurance: Extension of the SM&CR to insurers’, and PRA PS26/18 ‘Strengthening accountability: implementing the extension of the SM&CR to insurers’, along with Financial Conduct Authority (FCA) PS18/15 ‘Extending the Senior Managers and Certification Regime to insurers – Feedback to CP17/26 and CP17/41 and near final rules’. The FCA’s final rules for the implementation of the SM&CR for insurers can be found in FCA Handbook Notice 58.
The extension of the regime to insurers is being introduced by amendments to the Financial Services and Markets Act 2000 (FSMA) through the Bank of England and Financial Services Act 2016 (‘the 2016 Act’). The extended SM&CR for insurers will come into effect on Monday 10 December 2018, through the application of the Commencement regulations that have been published by HM Treasury for the relevant amendments to FSMA in the 2016 Act.
Implementation
The final rules in this PS will apply with effect from Monday 10 December 2018. This is the final PRA PS on the extension of SM&CR to insurers before the regime commences.
Responses to CP20/18
The PRA received no responses to CP20/18, and has made no changes to the rules as consulted on in CP20/18.
Policy Statement 27/18
Published on 17 September 2018
Overview
In this consultation paper (CP), the Prudential Regulation Authority (PRA) sets out its proposed rules for some consequential changes, and minor administrative amendments, related to the extension of the Senior Managers and Certification Regime (SM&CR or ‘the regime’) to insurers (see Appendix).
The CP should be read in conjunction with PRA Policy Statement (PS) 15/18 ‘Strengthening individual accountability in insurance: Extension of Senior Managers and Certification Regime to insurers’, and Financial Conduct Authority (FCA) PS18/15 ‘Extending the Senior Managers and Certification Regime to insurers – Feedback to CP17/26 and CP17/41 and near final rules’, along with the proposals in PRA CP18/18 ‘Strengthening accountability: implementing the extension of the SM&CR to insurers’.
This CP is relevant to Solvency II insurers (ie UK Solvency II firms, the Society of Lloyd’s and Lloyd’s managing agents, and third country (re)insurance branches), insurance special purpose vehicles (ISPVs), large non-Directive firms (NDFs), small NDFs and Swiss general insurers.
Summary of proposals
This CP includes proposals for some technical consequential changes to the rules in the PRA Rulebook for the implementation of the SM&CR, relating to the ‘current approved person approval’ status of those individuals who will be in a ‘designated senior management function’ following the commencement of the extension of the SM&CR to insurers. In addition, the CP includes some minor administrative amendments.
Implementation
The extended SM&CR for insurers will come into effect from Monday 10 December 2018. The PRA proposes that the rule changes in this CP will therefore apply from the same date (other than one minor administrative change in Annex H of the Appendix that will apply from Tuesday 1 January 2019).
Responses and next steps
This consultation closed on Wednesday 17 October 2018, so that final rules can be made in advance of implementation so as to give firms and industry participants certainty on the technical details of the regime prior to commencement on Monday 10 December 2018. Please address any comments or enquiries to CP20_18@bankofengland.co.uk.