On 18 October 2018, the PRA published a policy statement, PS26/18, which provides feedback to responses to its July 2018 consultation paper, CP18/18 "Strengthening accountability: implementing the extension of the senior managers and certification regime (SM&CR) to insurers".
The policy statement also provides a rule instrument, the PRA Rulebook: CRR Firms, Non CRR Firms, Solvency II Firms and Non Solvency II Firms: Senior Managers Regime and Senior Insurance Managers Regime (Amendment) (No 2) Instrument 2018, PRA 2018/21, with amendments to the final rules for the implementation of the extension of the SM&CR to insurers; along with a technical correction to the Insurance General Application Part of the PRA Rulebook. The final rules in will come into force on 10 December 2018.
In a change to the draft policy as consulted on in CP18/18, the PRA has proceeded with the inclusion of the individual conduct standards applicable to small non-Directive firms (NDFs) in the definition of "individual conduct requirements". This is consistent with the published policy in the PRA's July 2018 policy statement PS15/18 to extend the full set of regulatory reference requirements to small NDFs. The PRA has decided not to proceed with the proposal to delete from this definition references to parts of the PRA Rulebook and Financial Conduct Authority Handbook that are no longer in force. This is consistent with, and clarifies, the requirement that breaches of individual conduct requirements must be disclosed for the past six years.
The extension of the regime to insurers is being introduced by amendments to the Financial Services and Markets Act 2000 (FSMA) through the Bank of England and Financial Services Act 2016 (the 2016 Act). The extended SM&CR for insurers will come into effect on 10 December 2018, through the application of the commencement regulations that have been published by HM Treasury for the relevant amendments to FSMA in the 2016 Act.
Following the publication of the commencement regulations by HM Treasury, in September 2018 the PRA published a consultation paper, CP20/18, with some further proposed consequential technical amendments to its rules to take effect on 10 December 2018. The PRA says that these further consequential changes are not intended to make any substantive change to the final policy and rules in this policy statement. A further policy statement containing the final rules following the consultation in CP20/18 will be published before the commencement of the regime.