In November 2014, the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) set out proposals on how they intend to reflect the changes brought about by the Solvency II Directive and the Banking Reform Act 2013. In February 2015, the regulators proposed changes to the definition and scope of non-executive directors (NEDs) within the approval regime.
In this consultation paper (CP), the PRA and the FCA are providing further detail on the implementation of the proposals set out in previous consultations.
Summary of proposals
The CP is set out in two sections. The first section (Chapters 1 to 4) is joint text published by the FCA and PRA, setting out the consequential changes, transitional arrangements and forms required following the previous consultations on changes to the accountability regime for Solvency II firms.
The second section is FCA only and is relevant to dual regulated firms. Chapter 5 sets out FCA proposals for governance arrangements for Solvency II firms, and Chapter 6 sets out initial feedback to responses to the FCA’s previous consultation on changes to the accountability regime for Solvency II firms. Note that the PRA has already provided feedback on its corresponding consultation, which was published alongside the final rules on 23 March.
The objective of the proposals is to support the new regime by creating a structure within Solvency II firms that will increase the likelihood of matching individuals and roles appropriately to ensure high standards of conduct are observed.
This consultation closed on Friday 15 May 2015.
The PRA and FCA will consider the feedback received and will publish the final rules at a later date.