The PRA has published a consultation paper (CP8/17), which includes proposed amendments and optimisations to the Senior Insurance Managers Regime (SIMR). It also includes a proposal to strengthen governance through requiring insurers to take steps to encourage board diversity. This CP is relevant to all Solvency II insurance firms (i.e. UK Solvency II firms, the Society of Lloyd’s and Lloyd’s managing agents, and third country (re)insurance branches), and to large non-Directive firms (large NDFs).
The governance landscape for insurers continues to develop following the introduction of the Senior Insurance Managers Regime last year and PRA Supervisory Statement SS5/16 on Board Responsibilities. The Audit Directive, which applies to financial years beginning on or after 17 June 2016 (subject to transitional provisions), will affect the way in which insurers manage their audit arrangements, and in particular introduces independence requirements to most firms. The extension of the banking sector Senior Managers and Certification Regime (“SMCR”) to all authorised firms will also bring change to insurers’ compliance and governance processes. A consultation paper on the extension of the SMCR is expected in Q2 2017.
Our “at a glance” guide (which can be found here) provides a summary of recent developments in governance for insurance companies.