PRA published the policy statement PS1/18, which provides feedback to responses to Chapters 2 and 3 of the consultation paper CP8/17 titled "strengthening individual accountability in banking and insurance: optimizations to the Senior Insurance Managers Regime (SIMR) and changes to forms." PS1/18 contains final rules amending the SIMR (Appendix 1) and the updated supervisory statement SS35/15 on strengthening individual accountability in insurance (Appendix 2). This version of SS35/15 takes effect from December 10, 2018, which is the date announced by HM Treasury for commencement of the extension of the Senior Managers and Certification Regime (SM&CR) for insurers.
The updated SS35/15 also incorporates the changes that were proposed in CP14/17 to remove gender-based language and terminology from SS35/15. CP14/17 titled "strengthening individual accountability in insurance: extension of SM&CR to insurers" was published by PRA in July 2017. PRA has also updated SS35/15 to clarify its expectations on the implementation of the amendments to the SIMR, including the new Chief Operations function (SIMF24) and the new prescribed responsibility for the oversight of outsourced operational functions and activities.
PS1/18 is relevant to all Solvency II insurance firms and to large non-Directive firms. PRA received seven responses to the proposals in Chapter 2 and seven responses to the proposals in Chapter 3 of CP8/17. In response to the consultation feedback, PRA has made a slight modification to the final rules related to the new Head of Large Business Area function (SIMF6), as proposed in CP8/17. Chapter 2 of PS1/18 summarizes feedback on the proposed optimizations to the SIMR and the final policy of PRA. Chapter 3 summarizes feedback on the PRA proposals for diversity at boards of insurers and the final policy of PRA. Chapter 4 sets out timelines for implementing the rules and expectations in PS1/18, which are summarized as follows:
- The rule requiring insurers to have a diversity policy for their boards will become effective on April 09, 2018
- The rules to implement the optimizations to the SIMR will become effective on December 10, 2018
- Firms must 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 December 10, 2018
Effective Date: December 10, 2018 (SS35/15)
Keywords: Europe, UK, Banking, Insurance, Solvency II, SIMR, PS1/18, SS35/15, CP8/17, PRA
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