PRA Issues PS26/18 on Implementing the Extension of SM&CR to Insurers
PRA published policy statement (PS26/18) that provides feedback to responses to the consultation paper CP18/18 on implementing the extension of the Senior Managers and Certification Regime (SM&CR) to insurers. PS26/18 contains amendments to the final rules for the implementation of the extension of the SM&CR to insurers, along with a technical correction to the Insurance General Application Part of the PRA Rulebook. The final rules in PS26/18 will apply from December 10, 2018.
CP18/18 garnered one response that pertained to the general overlap rule, which already applies to insurers and deposit-takers and aims to minimize the overlap between the senior managers and approved person regimes of PRA and FCA. Amendments to this rule were not consulted on by PRA in CP18/18. The policy intent behind the extension of SM&CR to insurers has been to align the rules for all dual-regulated firms wherever possible. PRA, in conjunction with FCA, will continue to monitor effectiveness of the policy for application of the overlap rule to the approval process, when an individual will be performing both a PRA senior management function and an FCA governing function.
PS26/18 should be read in conjunction with PS15/18 of PRA and PS18/15 of FCA, which involve the extension of SM&CR to insurers. The extension of the regime to insurers is being introduced by amendments to the Financial Services and Markets Act 2000 (FSMA) through the BoE and Financial Services Act 2016 (the 2016 Act). The extended SM&CR for insurers will come into effect on December 10, 2018 through the application of the Commencement regulations that have been published by HM Treasury for the relevant amendments to FSMA in the 2016 Act. Following the publication of the Commencement regulations by HM Treasury, PRA published CP20/18 with further proposed consequential technical amendments to its rules to take effect on December 10, 2018. These further consequential changes are not intended to make any substantive change to the final policy and rules in PS26/18. A further policy statement containing the final rules following the consultation in CP20/18 will be published before the commencement of SM&CR.
Related Links
Effective Date: December 10, 2018
Keywords: Europe, UK, Insurance, Solvency II, SM&CR, Responses to Consultation, PS26/18, CP18/18, FCA, 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
Previous Article
FSB Publishes Summary of Plenary Meeting in ParisRelated 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.
