General Insurance Article - LMA publishes guidance on Senior Insurance Managers Regime

 Developed jointly by the Prudential Regulatory Authority (PRA) and the Financial Conduct Authority (FCA), the SIMR will come into force on 1 January 2016, replacing the current Approved Persons Regime.

  

 The proposed SIMR is a complex framework which, according to the LMA, is markedly different to the current regime. The new framework will affect all Board members and also senior managers and other employees in what the regulators refer to as ‘key’ functions, such as those responsible for internal audit and risk management.

  

 Steve Morrell, LMA senior executive for UK and international regulations, said: “The LMA has reviewed the current consultations and this initial guidance is designed to provide a simplified explanation of the rules and also practical tips for implementation.”

  

 “Many of the new rules will not be finalised until the regulators publish their final joint policy statement in late July-early August. However, this guidance represents our best view of the proposals as they stand currently. Managing agents will need to assess the final rules in the context of their own organisations and structures when they are published.”

  

 Regulators committed to reforming the Approved Persons Regime as part of the Financial Services (Banking Reform) Act 2013. The regime governs the conduct of senior individuals who effectively run a financial services business or have responsibility for important or critical areas of the business. The changes are also intended to address a range of governance and fitness/propriety requirements under the new Solvency II Directive.

  

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