The Senior Managers and Certification Regime (SM&CR) applied to all dual-regulated insurers from 10 December 2018.
How it applies
We extended the SM&CR in a way that is proportionate to the size of the firm. The requirements your firm needs to meet depends on whether your firm is a:
- Solvency II Insurer or Large Non-Directive Firm (NDF)
- Small Non-Directive Firm, Insurance Special Purpose Vehicle (ISPV) or Small Run-off Firms
You should check which tier your firm belongs in by reading the Guide to the SM&CR for insurers.
Who it applies to
The SM&CR applies to all insurance and reinsurance firms regulated by the FCA and the PRA.
- insurers and reinsurers
- the Society of Lloyd's
- managing agents
- UK branches of third-country firms and European Economic Area (EEA) firms
It replaced the Senior Insurance Managers Regime (SIMR) and the Revised Approved Persons Regime for insurance firms from 10 December 2018.
Guide to the SM&CR for insurers
The guide is a summary of our final rules and guidance on the SM&CR. It gives an overview of how the SM&CR works.
This includes details of the 3 key parts to the senior managers and certification regime.
The Conduct Rules
The Conduct Rules set minimum standards of individual behaviour in financial services. By applying the Conduct Rules to a broad range of staff we aim to improve individual accountability and awareness of conduct issues across firms.
The Conduct Rules apply to almost all employees who do financial services activities, or linked activities, in a firm. Some Conduct Rules apply to all employees, while others only apply to senior managers.
The Senior Managers Regime
The most senior people ('senior managers') who perform key roles ('senior management functions') will need PRA or FCA approval before starting their roles.
Every Senior Manager needs to have a 'statement of responsibilities' that clearly says what they are responsible and accountable for.
Solvency II firms and large non-directive firms also have to provide 'responsibilities maps'.
The Certification Regime
The Certification Regime applies to employees who aren't senior managers but whose role means it's possible for them to cause significant harm to the firm or its customers. These roles are called 'certification functions'.
These people don't need to be approved by us, but firms need to check and confirm ('certify') that they are fit and proper to perform their role at least once a year.
SM&CR policy statement: final rules published 26 July 2019
The policy statement summarises the feedback we received to Consultation Paper 19/4, our response to the feedback and sets out our final rules. These rules are relevant to all SM&CR firms, including banks and insurers.
In general, we have implemented the proposed changes to the SM&CR as consulted on, which include:
- confirming that the Head of Legal function is excluded from the requirement to be approved as a Senior Manager
- clarifying the scope of the Certification Regime, including in respect of the client dealing function
For more information, please read the Policy Statement 19/20: Optimising the Senior Managers & Certification Regime and feedback to CP19/4.