UK Insurance: PRA (3 October 2016)

Selected recent news from the UK's prudential regulator: 

On 28 September, the PRA published a policy statement on "Strengthening accountability in banking and insurance: PRA requirements on regulatory references (part II)". PS27/16 includes new and revised PRA rules on regulatory references, a revised Regulatory Reference Template and revisions to supervisory statements including SS35/15, "Strengthening individual accountability in insurance" (primarily the insertion of Chapter 5 on regulatory references). Solvency II insurance firms and Large NDFs are included within "Full-scope regulatory reference firms" and are required to use the Template for "relevant functions." Full regulatory reference requirements do not apply to Small NDFs as they are not currently subject to the full SIMR however this may change when the scope of the SM&CR is widened. (FCA-authorised firms will also not be subject to the full regulatory reference requirements.) The rules become effective on 7 March 2017.

On the same date, the PRA published a consultation paper including the "PRA’s proposed optimisations for the SIMR". In particular relation to insurers, CP34/16 proposes:

• amendments to Long form A, Short Form A, and Form E for Solvency II firms, and the SoR form for both Solvency II firms and large NDFs;
• that smaller insurers outsourcing their internal audit function, allocate a new Prescribed Responsibility to a NED who performs a SIMF or an FCA controlled function;
• a streamlined SIMR for firms in run-off that no longer have regulatory permissions to write new business; and
• corresponding changes to rules and (in addition to revisions for PS27/16 above) SS35/15 – Strengthening individual accountability in insurance.  (Note that SS35/15 only applies to Solvency II firms and the Society of Lloyd’s and managing agents.)

Also on 28 September, the PRA published CP35/16 which included proposals requiring UK branches of both EEA and non-EEA insurers to inform their workers about the regulators’ whistleblowing services.