Published on 18 October 2018
Strengthening accountability: Implementing the extension of the SM&CR to insurers - PS26/18
Overview
This Prudential Regulation Authority (PRA) Policy Statement (PS) provides feedback to responses to Consultation Paper (CP) 18/18 ‘Strengthening accountability: implementing the extension of the SM&CR to insurers’. It also provides a rule instrument with amendments to the final rules for the implementation of the extension of the Senior Managers and Certification Regime (SM&CR, ‘the regime’) to insurers; along with a technical correction to the Insurance General Application Part of the PRA Rulebook.
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 (collectively referred to as ‘insurers’). Some of the final amendments to rules are relevant to other PRA-regulated firms (Annex A, B and X in the Appendix).
This PS should be read in conjunction with PRA PS15/18 ‘Strengthening individual accountability in insurance: Extension of the SM&CR 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 CP20/18 ‘Strengthening accountability: implementing the extension of the SM&CR to insurers (Part 2)’.
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.
Timeline and next steps
The final rules in this PS will apply with effect from Monday 10 December 2018.
Following the publication of the Commencement regulations by HM Treasury, the PRA published CP20/18 with some further proposed consequential technical amendments to its rules to take effect on Monday 10 December 2018. These further consequential changes are not intended to make any substantive change to the final policy and rules in this PS. A further PS containing the final rules following the consultation in CP20/18 will be published before the commencement of the regime.
Policy Statement 26/18Published on 31 July 2018
Strengthening accountability: Implementing the extension of the SM&CR to insurers - CP18/18
Overview
In this consultation paper (CP), the Prudential Regulation Authority (PRA) sets out its proposed rules for a technical correction to the Solvency II firms: Insurance General Application Part of the PRA Rulebook, along with 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 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’.
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. Some of the proposals outlined in paragraphs 2.4 and 2.11, concerning cross references to the Financial Conduct Authority (FCA) Handbook in the PRA Rulebook and other minor consequential and administrative amendments, are also relevant to other PRA-regulated firms.
Responses and next steps
This consultation closed on Monday 1 October 2018, which is intended to ensure that final rules can be made in advance of implementation so that the industry has certainty on the technical details of the regime prior to commencement on Monday 10 December 2018. The PRA invites feedback on the proposals set out in this consultation. Please address any comments or enquiries to CP18_18@bankofengland.co.uk.