Insurance Regulation: FCA Reminder onApproved Persons Regime

The Financial Conduct Authority (FCA) today reminds insurance firms that are required to submit a conversion notification form to convert relevant individuals from the Approved Persons Regime to a Senior Management Function, that they have until midnight on 2 December 2018.

The culture and governance of firms is an ongoing priority for the FCA. A key part of the FCA’s work in this area is the extension of the Senior Managers and Certification Regime (SM&CR) to most of the firms we regulate.

The SM&CR, which aims to increase individual accountability within the financial sector, already applies to the banking sector and will be extended to the insurance industry on 10 December 2018.

Through the extension of the SM&CR, the FCA is seeking to encourage a culture where staff at all levels take personal responsibility for their actions and where firms and staff are clear who is responsible for what. The FCA’s new rules will ensure firms’ governance arrangements are transparent and set clear expectations for the conduct of all financial services staff.

Ahead of the extension of the SM&CR, those insurance firms that are required to submit a conversion notification form to convert relevant individuals from the Approved Persons Regime to a Senior Management Function, must do so by midnight on 2 December 2018. They will need to submit a conversion notification Form K alongside their Responsibilities Map and Statement of Responsibilities by this date. Insurance firms also need to have identified their Certification Staff and have trained their Certification Staff and Senior Managers in the relevant Conduct Rules.

To find out more about the full requirements and what paperwork may be needed, insurers should refer to the FCA’s Guide to the SM&CR for Insurers. For further help and information, firms can refer to the FCA website:https://www.fca.org.uk/firms/senior-managers-certification-regime/insurers

They can also contact their named supervisor (if applicable) or get in touch with the FCA’s customer contact centre:www.fca.org.uk/contact

Jonathan Davidson, Executive Director of Supervision- Retail and Authorisations at the FCA, said: “We care about culture because it is a key root cause of major conduct failings. We are committed to transforming culture in financial services as we believe this will have a positive impact on consumers and markets.

The SM&CR is an important way to ensure that individuals take personal responsibility for their actions as well as firms. The SM&CR is designed to make all financial services staff individually accountable for being competent and diligent and for acting with integrity in the interests of customers.  It also makes senior managers accountable, not only for their own behaviour, but for how they lead their staff.

“This is not a box ticking regime, it’s about the day to day behaviour of all staff.  It’s about creating a healthy culture and healthy outcomes for consumers and employees”

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