Summary: The first stage of the SMCR for insurers comes into force on 10 December 2018. While some aspects of the regime will be familiar to insurers there are a number of new elements to get to grips with.
In anticipation of the implementation date we have set out below 10 questions for insurers to consider when assessing whether they are ready for SMCR.
- Have you completed the process of identifying which current controlled functions will become Senior Management Function (“SMF”) holders and which individuals who were not previously approved persons will now need to be approved — and are the required regulatory notifications ready to be sent out (including FCA Form K)?
- Have you identified all of your certification staff? Remember, whilst fit and proper certificates are not required until 10 December 2019, certification staff should have been identified by 10 December 2018.
- Have all the Prescribed Responsibilities been assigned to SMF holders? Remember there are additional Prescribed Responsibilities that will need to be allocated under SMCR, that did not exist under SIMR.
- Have you updated your Management Responsibilities Map (previously known as your Governance Map)? In particular, is there a clear identification and allocation of “overall responsibility”, as required by the new FCA rules? This will need to be submitted to the FCA next month.
- Have all the Statements of Responsibilities (previously known as Scope of Responsibilities) for SMF Holders (and Key Function Holders) been updated? These must align with the Management Responsibilities Map and may be scrutinised by the regulators.
- Have you put in place a written policy in relation to the requirement for SMF handovers?
- Do you have a suitable regulatory reference policy in place? This should also cover incoming certification staff.
- Have your SMF Holders and certification staff received the required training on their regulatory responsibilities? Remember that certification staff as well as SMF Holders will be required to abide by the Conduct Rules from 10 December 2018.
- Have appraisal documents and employment contracts been amended to take into account adherence to the SMCR? This will include references to fitness and propriety assessments and compliance with the Conduct Rules.
- Have other relevant policies and procedures been updated (for example, your fit and proper policy), and responsibility for them been assigned to specific functions?