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.
Effective Date: December 10, 2018
Keywords: Europe, UK, Insurance, Solvency II, SM&CR, Responses to Consultation, PS26/18, CP18/18, FCA, PRA
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