The PRA and FCA are implementing (a) the recommendations in the final report of the Parliamentary Commission on Banking Standards; and (b) the key function holder articles in Solvency II, by creating:
- A Senior Managers Regime (SMR) and Senior Insurers Managers Regime (SIMR) for individuals – firms will be required to allocate a range of responsibilities to individuals who are subject to regulatory approval, and to regularly assess their fitness and propriety;
- A Certification Regime (CR) for:
- Banks – relevant firms will be required to assess the fitness and propriety of certain employees who could pose a risk of significant harm to the firm or its customers; and
- Insurers – insurers will be required to assess the ongoing fitness and propriety of individuals performing key functions; and
- New Conduct Rules (CRs) for banks and Solvency II firms that includes the responsibility of senior managers for oversight of any delegated activities.
The SMR and CR for banks, and the UK branches of foreign banks, will come into force on 7 March 2016. Firms will have until 8 February 2016 to give the regulators the names of their senior staff who will be senior managers under the new regime.
The PRA’s new “Strengthening accountability” webpage doesn’t include the equivalent information for insurers – although it seems all but certain that the SIMR, the CR, and the CRs, will begin to apply to Insurers (and perhaps the UK branches of foreign insurers?) on 1 January 2016.
This will be supplemented, at 10am tomorrow, when the PRA publishes Policy Statement 3/15: “Strengthening individual accountability in banking and insurance – responses to CP14/14 and CP26/14” (*).
On 27 March 2015, the PRA will publish a Consultation Paper on (a) technical issues for the SIMR (including new forms and transitional arrangements); and (b) a streamlined SIMR for insurers that are out of scope of Solvency II.
Before the end of:
- June 2015, the PRA will publish a Policy Statement and final rules to substantively complete the SIMR for Solvency II insurers; and
- September 2015, the PRA will publish a Policy statement and final rules to complete the SIMR for Solvency II insurers, and the streamlined SIMR for smaller insurers.