Strengthening accountability in banking and insurance: Implementation of SM&CR and SIMR; and PRA requirements on regulatory references

Policy Statement 5/16

Published on 15 February 2016

Background

In October 2015, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) (‘the regulators’) consulted on a set of proposals for the provision of regulatory references, by current or former employers, in respect of individuals applying for certain roles at deposit-takers, insurers, and PRA-designated investment firms. The proposals were set out in a joint publication (PRA CP36/15 and FCA CP31/15).

Chapter 4 of the same publication (PRA CP36/15) also set out, in relation to the Senior Insurance Managers Regime (SIMR), the PRA’s proposals on scope of responsibilities (SoR) documents, and the associated governance map, for all key function holders (KFHs) at Solvency II insurers and large non-Directive firms (NDFs) (collectively referred to as ‘insurers’).

In November 2015, the regulators consulted in a joint publication (PRA CP41/15 and FCA CP15/37) on a set of proposals for the application of the SIMR to Swiss general insurers.

Chapter 4 of the same publication (PRA CP41/15) also set out the PRA’s proposals for some further clarificatory rule changes in relation to KFH notifications by insurers; as well as proposals for consequential and minor amendments to the PRA Rulebook (and PRA Handbook) as a result of the introduction of the Senior Managers & Certification Regime (SM&CR) and the SIMR.

Overview

This policy statement (PS) provides feedback to the above consultations, and includes the corresponding rules that have been made by the PRA. It also includes the rules made by the FCA in respect of Swiss general insurers.

The following table outlines the contents of each chapter of this PS, shows the firms to which it is relevant, the Appendix where the new rules can be found, and the effective commencement date for these rules.

Chapter	Relevant to:	Proposals responded to:	Rules available in:	Effective date for new rules:
2	All PRA-regulated firms	CP36/15 (other than Chapter 4) in relation to the provision of regulatory references by deposit-takers, insurers, and PRA investment firms.	Appendix 1 sets out the PRA’s rules. See also FCA PS16/3 for the FCA’s rules.	7 March 2016 Note: 15 February 2016 for rules in Annex C of Appendix 3, and Part 1 of Annex C of Appendix 8; in relation to the grandfathering provisions for current approved persons
3	Swiss general insurers	Section 3, Chapter 4 of CP41/15 and FCA CP15/37, in relation to the application of the SIMR to Swiss general insurers	Appendices 2-3 set out the PRA’s rules. Appendix 8 sets out the FCA’s rules.	7 March 2016
4	Solvency II insurers (and large NDFs)	Chapter 4 of CP36/15, and Chapter 4 (other than section 3) of CP41/15 in relation to the SIMR	Appendices 4-7 set out the PRA’s rules.	15 February 2016 for rules in Appendix 4 7 March 2016 for rules in Appendices 5-7
4	All banks, building societies, credit unions, and PRA-designated investment firms	Section 4, Chapter 4 of CP41/15 in relation to the SM&CR	Appendices 6-7 set out the PRA’s rules.	7 March 2016