PRA Publishes PS15/18 on the Extension of SM&CR to Insurers
PRA published a policy statement (PS15/18) providing feedback to responses to CP14/17 on extension of the Senior Managers and Certification Regime (SM&CR) to insurers and to CP28/17 on implementing the extension of the SM&CR to insurers (along with certain other amendments). Additionally, PRA updated the supervisory statements SS39/15, SS5/16, SS28/15, SS10/16, and SS3/17 to reflect changes in terminology as a result of the publication of PS15/18. The extension of the SM&CR will apply with effect from December 10, 2018.
CP14/17 was issued on July 26, 2017 and its comment period ended on November 03, 2017 while CP28/17 was issued on December 13, 2017 and its comment period ended on February 21, 2018. PRA received 14 responses to the proposals in CP14/17 and eight responses to the proposals in CP28/17. The responses received were broadly supportive of the policy intent and PRA made some minor changes to the policy proposals as a result of the feedback. Chapters 2 and 3 of PS15/18 summarize feedback on the PRA proposals in CP14/17 and CP28/17 and on the final policy of PRA. PS15/18 is relevant to all Solvency II insurance firms (UK Solvency II firms, the Society of Lloyd’s and managing agents, and third-country (re)insurance branches) and to insurance special purpose vehicles, large non-Directive firms, and small non-Directive firms. PS15/18 contains the following:
- The final rules for the extension of SM&CR to insurers by amending the Senior Insurance Managers Regime or SIMR (Appendix 1)
- An updated SS35/15 on strengthening individual accountability in insurance (Appendix 2) and terminology updates to other existing supervisory statements
- A consolidated Statement of Policy on conditions, time limits, and variations of approval (Appendix 3)
- The streamlined set of forms for SM&CR and amendments to Part 4A permissions forms (Appendix 4)
SS39/15 sets out the RA expectations for firms in relation to the whistleblowing procedures, training, and whistleblowers’ champion. SS5/16 is related to corporate governance. SS28/15 sets out the PRA approach to strengthening individual accountability in banking. SS10/16 is related to remuneration requirements under Solvency II and SS3/17 sets out the PRA expectations from firms investing in illiquid, unrated assets within their Solvency II matching adjustment portfolios.
Related Links
Effective Date: December 10, 2018
Keywords: Europe, UK, Insurance, Banking, Solvency II, SM&CR, SIMR, Accountability, PS15/18, CP14/17, CP28/17, PRA
Featured Experts
Paul McCarney
Insurance product strategist; insurance domain expert; extensive experience developing risk assessment frameworks for insurers
Brian Robinson
Actuary; risk management specialist; corporate and capital modelling expert
Related Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.