Senior executives in insurance are to be held personally responsible for misconduct, as part of plans to extend the senior managers and certification regime (SMCR) later this year, the Treasury has confirmed
Currently the regime applies to banks, building societies, credit unions, investment firms and UK branches of foreign banks. The government previously legislated to extend the SMCR across all financial services firms.
The extension into insurance is the start of this, and will be effective from 10 December 2018.
The Financial Conduct Authority (FCA) is also consulting on how the regime will apply when it is extended to include smaller firms regulated only by the FCA (also known as solo-regulated firms).
The new rules will ensure that a code of conduct is set out for all staff, and that employees covered by SMCR requirements are approved annually by their firm.
John Glen, the economic secretary to the Treasury and City minister said: ‘Britain’s first-class regulation is one of many reasons our country is so attractive for financial services investment. The SMCR plays a big part in this, ensuring that those at the top display the behaviours and values that the British people expect.
‘The extension of the regime to insurance firms will ensure individual accountability for misconduct at the most senior levels within the insurance sector.’
The FCA’s consultation on how insurers and individuals will move to the SMCR closes on 21 February, and a policy statement is expected in summer 2018. The FCA is also consulting on how the regime will apply when it is extended to include smaller firms regulated only by the FCA (also known as solo-regulated firms), with the same deadlines.
Report by Pat Sweet
