This Prudential Regulation Authority (PRA) Policy Statement (PS) provides feedback to responses to Chapters 2 and 3 of Consultation Paper (CP) 8/17 ‘Strengthening individual accountability in banking and insurance: optimisations to the SIMR and changes to forms’. It also provides:
- the final rules amending the Senior Insurance Managers Regime (SIMR) (Appendix 1); and
- an updated Supervisory Statement (SS) 35/15 ‘Strengthening individual accountability in insurance’ (Appendix 2).
The updated SS35/15 also incorporates the changes that were proposed in CP14/17 to remove gender-based language and terminology from SS35/15, as none of the respondents included comments on those proposals.
This PS is relevant to all Solvency II insurance firms (ie UK Solvency II firms; the Society of Lloyd’s and managing agents; and third country (re)insurance branches), and to large non-Directive firms (large NDFs) (collectively referred to as ‘insurers’) - These are insurers out of scope of Solvency II for which the value of assets in respect of regulated activities, as included in their two most recent annual reports, is more than £25 million. Large non-Directive insurer is defined in the PRA Rulebook Glossary.
The PRA received seven responses to the proposals in Chapter 2 of CP8/17, and seven responses to the proposals in Chapter 3 of CP8/17:
- Chapter 2 of this PS summarises feedback on the proposed optimisations to the SIMR and the PRA’s final policy.
- Chapter 3 of this PS summarises feedback on the PRA’s proposals for diversity at boards of insurers and the PRA’s final policy.
- Chapter 4 sets out the various timelines for implementing the rules and expectations in this PS.
The rule requiring insurers to have a diversity policy for their boards will become effective on Monday 9 April 2018; the rules to implement the optimisations to the SIMR will become effective on Monday 10 December 2018; and firms should submit the forms for the approval of individuals who will perform the Chief Operations function (SIMF24), or the Head of Large Business Area function (SIMF6), from Monday 10 December 2018.