5 July 2018
The FCA and PRA have published the near final rules on the extended senior managers and certification regimes ("SMCR") that will apply to all sectors of the insurance industry regulated by the FCA and/or PRA with effect from 10 December 2018 (subject to some transitional provisions in relation to certification and the conduct rules). The FCA has also published a "Guide for Insurers" that includes a SMCR "readiness checklist". Generally, the regulators have not made significant changes to the original proposals consulted on.
The 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 ("ISPVs"). All insurers will be subject to the FCA Certification regime, Fit and Proper test obligations and Conduct Rules requirements.
Firms should start preparing for commencement of the new regime addressing what changes may need to be made to training, employment documents and compliance policies and procedures and what steps should be taken to ensure that senior individuals understand the obligations of the regime for them
Near Final Rules: Extension of the senior managers and certification regimes to the insurance sector