PRA and FCA Consult on Implementing Extension of SM&CR to Insurers
PRA published the consultation paper CP28/17 that sets out the proposed changes to forms, along with other consequential changes and minor administrative amendments related to the extension of the Senior Managers and Certification Regime (SM&CR) to insurers. It also sets out proposals for the removal of gendered language from the SM&CR for banking firms and insurers. FCA also published a package of proposals (including CP17/40, CP17/41, and CP17/42) on how firms and individuals will transition to the SM&CR. All the PRA and FCA consultations close on February 21, 2018.
CP28/17 includes the following appendices: draft instrument (Appendix 1); amended Part 4A Permissions forms (Appendix 2); and the rationalized SM&CR forms for dual-regulated banking firms and insurers (Appendix 3). The key proposals in CP28/17 include:
- The rationalization of the existing SM&CR/SIMR forms to produce a streamlined set of forms, and amendments to Part 4A Permission forms (Chapter 2)
- Implementing the extension to insurers, including some transitional arrangements and changes to references to the existing Senior Insurance Managers Regime (SIMR) and Senior Insurance Management Functions or SIMFs (Chapter 3)
- The process for transferring from a Senior Management Function (SMF) at an insurance firm to a banking firm (Chapter 4)
- The removal of gendered language from the SM&CR (Chapter 5)
CP28/17 of PRA should be read in conjunction with CP8/17, which proposed optimizations to the existing SIMR, and CP14/17, which proposed the extension of the SM&CR to insurers. CP28/17 is relevant to PRA-authorized UK banks, building societies, credit unions, including UK branches of non-EEA firms, and PRA-designated UK investment firms (banking firms), Solvency II insurers (that is, 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. The extended SM&CR for insurers will not come into effect until a commencement date has been set by HM Treasury, at which point PRA proposes to publish the final policy and rules. This is currently expected during 2018.
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Comment Due Date: February 21, 2018
Keywords: Europe, EU, UK, Banking, Insurance, SM&CR, SIMR, Accountability, FCA, PRA
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