In advance of Solvency II implementation, the Central Bank’s Fitness and Probity Regime was reviewed to determine its compatibility with the Solvency II regime. Changes to be made to the Fitness and Probity Regime for all (re) insurance undertakings include:
- Key Function Holders
Under Solvency II, all undertakings are required to have the four key functions of the System of Governance (Compliance, Internal Audit, Risk Management and Actuarial Functions) in place from 1 January 2016. Undertakings that do not currently have these functions in place will be required to establish the function and designate an individual to be responsible for each function and submit an IQ (“Individual Questionnaire”) to the Central Bank for approval in advance of 1 January 2016.
- Outsourcing of Key Functions
The Central Bank requires that, where key functions are outsourced, the undertaking designates a current PCF (“Pre-Approval Controlled Functions”) holder within the undertaking with overall responsibility for the outsourced arrangement. Undertakings that outsource key functions will therefore be required to notify the Central Bank of the PCF(s) with responsibility for the key functions.
- Head of the Actuarial Function
The domestic Actuarial Regime introduces the requirement for all undertakings to appoint a Head of Actuarial Function (“HoAF”). This role incorporates responsibility for the tasks of the actuarial function as outlined in Article 48 of the Solvency II Directive along with added responsibilities outlined in the Domestic Actuarial Regime.
- Removal of Chief Actuary and Signing Actuary
PCF20 (“Chief Actuary”) and PCF44 (“Signing Actuary”) will be removed as PCFs from the Fitness and Probity Regime. These amendments do not affect the role or responsibilities held by these individuals but simply remove the roles from the pre-approval provisions of the Fitness and Probity Regime.
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