Senior Insurance Managers Regime: a streamlined approach for non-Solvency II firms

Policy Statement 21/15 | Consultation Paper 12/15

Published on 13 August 2015

The Senior Insurance Managers Regime: a streamlined approach for non-Solvency II firms – PS21/15

This policy statement provides feedback on CP12/15 Senior Insurance Managers Regime: a streamlined approach for non-Solvency II firms which proposed changes in relation to the:

  • scope of the Senior Insurance Managers Regime (SIMR);
  • criteria for fitness and propriety; and
  • conduct of individuals working for non-Solvency II insurance firms.

The appendix to this PS sets out final rules to revise the current Approved Persons Regime for those insurance firms outside the scope of Solvency II.

This PS is relevant to those insurance firms that are not within the scope of the Solvency II Directive. In addition, these rules will cover certain run-off firms, so long as these firms are not subject to the Solvency II rules in accordance with Transitional Measures 2 in the Solvency II Firms section of the PRA Rulebook. All of these firms are described collectively as non-Directive firms (NDFs) in this PS.

The final rules in this PS are not relevant to those NDFs with assets of more than £25 million; the PRA has published proposals for these firms in CP26/15.

NDFs are referred to CP26/15 for details of the transitional arrangements and relevant forms for the implementation of the new regime.

Readers may also find it useful to refer to the FCA’s website.

PDFPolicy Statement 21/15

Appendix

PDFPRA Rulebook: Non-Solvency II Firms: Senior Insurance Managers Regime Instrument 2015


Published on 27 March 2015

Senior Insurance Managers Regime: a streamlined approach for non-Solvency II firms - CP12/15

This consultation paper seeks feedback on draft rules that set out how the Prudential Regulation Authority (PRA) intends to apply the Senior Insurance Managers Regime (SIMR) in a streamlined manner to firms outside of the scope of Solvency II.

Those who run regulated firms should have clearly defined responsibilities and behave with integrity, honesty, and skill. The SIMR is being introduced by the PRA to facilitate this. On 23 March, the PRA set out final rules, following consultation, in respect of how the SIMR will apply to Solvency II firms. 

The streamlined SIMR will apply to insurance firms that are not Solvency II firms. It will also apply on a transitional basis to run-off firms, so long as these firms are not subject to the Solvency II rules in accordance with Transitional Measures 2 in the Solvency II Firms section of the PRA Rulebook. Collectively, the firms to which the streamlined SIMR will apply are described as ‘non-Directive firms’ or ‘NDFs’.

Summary of proposals

NDFs pose different risks to the PRA’s objectives compared with Solvency II firms. For example, almost all of these firms have assets of less than £25 million and annual premium income of less than £5 million. Accordingly, many features of the SIMR have been streamlined to take a more proportionate approach to the way the regime would apply to NDFs.

The draft rules set out proposals for:

  • how the current list of possible controlled functions would be simplified to a single small insurer senior management function (SISMF);
  • how the fitness and propriety of those individuals running NDFs will be assessed; 
  • and how conduct standards would be applied to the senior managers of NDFs.

Responses

This consultation closed on Friday 15 May 2015.

PDFConsultation Paper 12/15

Firms should note that the Financial Conduct Authority (FCA) is consulting separately on proposed amendments to its Approved Persons Regime for NDFs. 
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