In this consultation paper (CP), the Prudential Regulation Authority (PRA) sets out its proposed rules for 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 PRA 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’, along with the proposals in PRA CP18/18 ‘Strengthening accountability: implementing the extension of the SM&CR to insurers’.
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.
Summary of proposals
This CP includes proposals for some technical consequential changes to the rules in the PRA Rulebook for the implementation of the SM&CR, relating to the ‘current approved person approval’ status of those individuals who will be in a ‘designated senior management function’ following the commencement of the extension of the SM&CR to insurers. In addition, the CP includes some minor administrative amendments.
The extended SM&CR for insurers will come into effect from Monday 10 December 2018. The PRA proposes that the rule changes in this CP will therefore apply from the same date (other than one minor administrative change in Annex H of the Appendix that will apply from Tuesday 1 January 2019).
Responses and next steps
This consultation closed on Wednesday 17 October 2018, so that final rules can be made in advance of implementation so as to give firms and industry participants certainty on the technical details of the regime prior to commencement on Monday 10 December 2018. Please address any comments or enquiries to CP20_18@bankofengland.co.uk.