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PS12/17 - Strengthening Individual Accountability in Banking and Insurance: Amendments and Optimisations

This Policy Statement (PS) provides feedback to responses to Consultation Paper (CP) 34/16 'strengthening individual accountability in banking and insurance: amendments and optimisations'.  It also provides:

  • the final rules amending the Senior Insurance Managers Regime (SIMR) (Appendix 2); 
  • updates to Supervisory Statement  (SS) 28/15 'Strengthening individual accountability in insurance' (Appendix 4); and
  • the PRA Statement of Policy (SoP) 'Conditions, time limits and variations of approval' (Appendix 5); and
  • The final rules also insert the links to Forms B, C, and D, into Large Non-Solvency II Firms -- Senior Insurance Managers Regime -- Applications and Notifications 7, and Non-Solvency II Firms -- Senior Insurance Managers Regime -- Applications and Notifications 7. The links were omitted in error when those Parts were published in PS26/15 (Appendix 6)

The final rules relating to the implementation of the amendments to the SM&CR and SIMR in the BoE Act do not differ significantly from those proposed in CP34/16. Most respondents supported the relevant proposals in CP34/16.
The rules and expectations published in this PS will become effective at different times.
The optimisations to the SIMR described in Chapter 4 of this PS will become effective on Tuesday 12 September 2017.  The PRA proposed some technical modifications to SIMR to enhance the proportionate, risk-based application of the regime and this is what Chapter 4 covers, it includes:

  • Outsourcing of the internal audit function by smaller insurers:  The PRA proposal to exempt 'not significant' Solvency II firms  from the requirement to have a SIMF5 where they elect to outsource their internal audit function to a third party -- this has been made into made rules.  However, these firms would be required to allocate a new Prescribed Responsibility to one of their oversight (i.e. non-executive) SIMFs or FCA Controlled Function (CF), such as the Chair of the Audit Committee (SIMF11)
  • Firms in run-off that no longer have regulatory permissions to write new business:   The PRA proposed that certain run-off firms without permission to write new business should be subject to a streamlined SIMR.
  • Amended Forms - In CP36/14, the PRA proposed amendments to the Long Form A, Short Form A, Form E for Solvency II firms and the SoR form for both Solvency II firms and large NDFs.  The PRA has included final versions of the forms in Appendix 6, with some slight modifications.

The full document can be found here.