In the consultation paper (CP), the Prudential Regulation Authority (PRA) sets out the proposed changes to forms and other consequential changes and minor administrative amendments related to the extension of the Senior Managers and Certification Regime (SM&CR, ‘the regime’) to insurers. It also sets out proposals for the removal of gendered language from the SM&CR for banking firms and insurers, amongst other changes. It should be read in conjunction with CP8/17, which proposed optimisations to the existing Senior Insurance Managers Regime (SIMR), and CP14/17, which proposed the extension of the SM&CR to insurers.
This CP is relevant to PRA-authorised UK banks, building societies, credit unions, including UK branches of non-EEA firms and PRA-designated UK investment firms (‘banking firms’), Solvency II insurers (ie UK Solvency II firms, the Society of Lloyd’s and Lloyd’s managing agents, 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 on:
(i) the rationalisation of the existing SM&CR/SIMR forms to produce a streamlined set of forms, and amendments to Part 4A Permission forms (Chapter 2);
(ii) implementing the extension to insurers, including some transitional arrangements and changes to references to the existing SIMR and Senior Insurance Management Functions (SIMFs) (Chapter 3);
(iii) the process for transferring from an SMF at an insurance firm to a banking firm (Chapter 4); and
(iv) the removal of gendered language from the SM&CR (Chapter 5).
The proposed changes to supervisory statements are to update terminology to reflect the extension and to replace references to ‘chairman’ with ‘chair’. These changes are described in Chapter 3 and 5. They are consequential to the changes to PRA rules so the draft amendments have not been included in this CP. This CP includes the following appendices: draft instrument (Appendix 1); amended Part 4A Permissions forms (Appendix 2); and the rationalised SM&CR forms for dual-regulated banking firms and insurers (Appendix 3).
This CP should be read in conjunction with Financial Conduct Authority (FCA) CP17/41, also published on Wednesday 13 December 2017, which contains the FCA’s equivalent proposals to implement the extension.
The extended SM&CR for insurers will not come into effect until a commencement date has been set by HM Treasury, at which point the PRA proposes to publish the final policy and rules. This is currently expected during 2018.
Responses and next steps
This consultation closed Wednesday 21 February 2018. Please address any comments or enquiries to CP28_17@bankofengland.co.uk.
The CP including appendices runs to 337 pages. To be helpful to readers we have attached a complete and split version below.