Clifford Chance
Extension of the Senior Managers and Certification Regimes to the Insurance Sector
1 August 2017
On 26 July 2017 the FCA and PRA published their proposals to extend the senior managers and certification regimes (SMCR) to all sectors of the insurance and reinsurance industry regulated by the FCA and/or PRA.
Going forward virtually everyone in the insurance sector will be subject to increased regulatory requirements and expectations as to how they conduct themselves. For insurers currently subject to the PRA's Senior Insurance Managers Regime (SIMR) and the FCA's Approved Persons Regime (APR), the proposed certification requirements and wider application of conduct rules are likely to have a significant impact.
A full scope SMCR regime will apply to Solvency II firms and large Non Directive Firms (NDFs) and a streamlined regime will apply to small NDF's, small run off vehicles and Insurance Special Purpose Vehicles (ISPV's).
All insurers will be subject to the Certification regime, Fit and Proper test obligations and Conduct Rules requirements.
This briefing will help firms and their employees understand what they need to do to ensure a smooth transition to the new regime which is expected to come into effect from 2018, (probably on a transitional basis). In many cases, firms may have to make substantial changes to training, employment documents and compliance policies and procedures and senior individuals will need to understand the possible impact on them personally.
