The Prudential Regulation Authority and the Financial Conduct Authority (FCA) will implement the Senior Managers and Certification Regime (SM&CR) for insurers on 10 December 2018 and all FCA-authorised firms will be subject to the SM&CR from 9 December 2019.

Key to the SM&CR is individual accountability – the principle that any failing on the part of a firm should lead back to an individual who can be held to account by the regulator.

The SM&CR also puts the onus on the firm to identify and certify those whose roles might involve a risk of significant harm to the firm or any of its customers, and to provide training to virtually all staff on the application of the conduct rules.

While insurers have already had to implement the Senior Insurance Managers Regime, brokers will find the SM&CR requires a significant step-change in the regulator's approach to governance and accountability.

The regulators will inevitably want to demonstrate that the SM&CR can hold individuals to account in a way that the current approved persons regime conspicuously failed to do after the financial crisis. It is therefore only a matter of time before a senior manager at an insurer or broker is held personally accountable for a failure on their watch.