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Application provision

1.1 Unless otherwise stated, this Part applies to:

  1. (1) a UK Solvency II firm;
  2. (2) in accordance with Insurance General Application 3, the Society, as modified by 11;
  3. (3) in accordance with Insurance General Application 3, managing agents, as modified by 11;
  4. (4) a third country branch undertaking (other than a Swiss general insurer); and
  5. (5) a UK ISPV, in accordance with 12.

1

Application and Definitions

1.1

07/03/2016

Unless otherwise stated, this Part applies to:

  1. (1) a UK Solvency II firm;
  2. (2) in accordance with Insurance General Application 3, the Society, as modified by 11;
  3. (3) in accordance with Insurance General Application 3, managing agents, as modified by 11;
  4. (4) a third country branch undertaking (other than a Swiss general insurer); and
  5. (5) a UK ISPV, in accordance with 12.

1.2

12/09/2017

In this Part, the following definitions shall apply:

Chairman function

has the meaning given in 4.1.

Chairman of Audit Committee function

has the meaning given in 4.3.

Chairman of Remuneration Committee function

has the meaning given in 4.4.

Chairman of Risk Committee function

has the meaning given in 4.2.

Chief Actuary function

has the meaning given in 7.1.

Chief Executive function

has the meaning given in 3.1.

Chief Finance function

has the meaning given in 3.2.

Chief Risk function

has the meaning given in 3.3.

Chief Underwriting Officer function

has the meaning given in 9.2.

FCA activities

means a function which would, except for SUP10A.11.12R of the FCA Handbook, be an FCA governing function.

Group Entity Senior Insurance Manager function

has the meaning given in 5.1.

Head of Internal Audit function

has the meaning given in 3.4.

Head of small run-off firm function

has the meaning given in 6A.2.

Head of Third Country Branch function

has the meaning given in 6.2.

Senior Independent Director function

has the meaning given in 4.5.

Underwriting Risk Oversight function

has the meaning given in 10.2.

With-Profits Actuary function

has the meaning given in 8.2.

2

General

2.1

07/03/2016

Each of the functions in 310 is a controlled function and a senior insurance management function.

2.2

07/03/2016

Senior insurance management function holders must each be approved by the PRA to perform the applicable senior insurance management function.

2.3

12/09/2017

  1. (1) A firm (other than a third country branch undertaking or a small run-off firm) must ensure that one or more persons performs each of the following senior insurance management functions on its behalf:
    1. (a) the Chief Executive function;
    2. (b) the Chief Finance function; and
    3. (c) the Chairman function.
  2. (2) If a vacancy arises in respect of one or more of the senior insurance management functions set out in (1), a firm must ensure that it appoints a person to fill that vacancy as soon as practicable.

2.4

07/03/2016

To the extent that:

  1. (1) a firm appoints a person to perform a key function which, but for this rule, would be a senior insurance management function;
  2. (2) the appointment is solely to provide cover for a senior insurance management function holder whose absence is:
    1. (a) temporary; or
    2. (b) reasonably unforeseen; and
  3. (3) the appointment is for less than 12 weeks in a consecutive 12-month period,

the description of the applicable senior insurance management function does not relate to those activities of that person.

2.5

07/03/2016

  1. (1) If, in relation to a firm, a senior insurance management function holder also performs FCA activities, performance of the senior insurance management function will include the performance of those FCA activities, provided the following conditions are met:
    1. (a) the PRA’s approval to perform that senior insurance management function has been granted and continues in force;
    2. (b) at the time of approval being granted by the PRA, that person was not subject to an FCA approval to perform the particular FCA governing function;
    3. (c) the firm made the notification required by SUP10A.11.12 R (4) of the FCA Handbook; and
    4. (d) that person performs and is continuing to perform the FCA activities.
  2. (2) If, in relation to a firm, a senior insurance management function holder has been performing FCA activities in the circumstances set out in (1), and that person:
    1. (a) ceases to perform the senior insurance management function;
    2. (b) within three months of ceasing performance, is approved to perform a new senior insurance management function at the firm; and
    3. (c) continues to perform the FCA activities,
  3.       performance of the new senior insurance management function will include the performance of those FCA activities, provided the conditions in (1) (a) to (d) are met.

2.6

07/03/2016

If a senior insurance management function holder to whom 2.5 applies ceases to perform a senior insurance management function but continues to perform the FCA activities, 2.5(1) will continue to apply in respect of the performance of the FCA activities until the earlier of:

  1. (1) approval by the FCA in respect of the performance by that person of those FCA activities as an FCA governing function in relation to the firm; or
  2. (2) three months from the time that the person ceased to perform that senior insurance management function.

2.7

12/09/2017

If a firm that is not significant outsources its internal audit function to an external third party service provider (that is, a service provider outside the firm or the firm’s group), the firm is not required to have any person(s) approved to perform the Head of Internal Audit function.

3

Executive

3.1

07/03/2016

The Chief Executive function (SIMF1) is the function of having responsibility, under the immediate authority of the governing body, alone or jointly with others, for carrying out the management of the conduct of the whole of the business (or relevant activities) of a firm.

3.2

07/03/2016

The Chief Finance function (SIMF2) is the function of having responsibility for the management of the financial resources of a firm and reporting to the governing body of a firm in relation to its financial affairs.

3.3

07/03/2016

The Chief Risk function (SIMF4) is the function of having responsibility for overall management of the risk management system specified in Conditions Governing Business 3.

3.4

07/03/2016

The Head of Internal Audit function (SIMF5) is the function of having responsibility for the management of the internal audit function specified in Conditions Governing Business 5.

4

Oversight

4.1

07/03/2016

The Chairman function (SIMF9) is the function of having responsibility for chairing, and overseeing the performance of the governing body of a firm.

4.2

07/03/2016

The Chairman of Risk Committee function (SIMF10) is the function of having responsibility for chairing, and overseeing the performance of any committee responsible for the oversight of the risk management system specified in Conditions Governing Business 3.

4.3

07/03/2016

The Chairman of Audit Committee function (SIMF11) is the function of having responsibility for chairing and overseeing the performance of any committee responsible for the oversight of the internal audit function specified in Conditions Governing Business 5.

4.4

07/03/2016

The Chairman of Remuneration Committee function (SIMF12) is the function of having responsibility for chairing and overseeing the performance of any committee responsible for the oversight of the design or implementation of the remuneration policies and practices of a firm.

4.5

07/03/2016

The Senior Independent Director function (SIMF14) is the function of performing the role of a senior independent director, and having particular responsibility for leading the assessment of performance of the person performing the Chairman function.

5

Group Entities

5.1

07/03/2016

The Group Entity Senior Insurance Manager function (SIMF7) is the function of having a significant influence on the management or conduct of one or more aspects of the affairs of a firm in relation to its regulated activities (other than in the course of the performance of another senior insurance management function) and which is performed by a person employed by, or an officer of:

  1. (1) a parent undertaking or holding company of a firm; or
  2. (2) another undertaking which is a member of the firm’s group.

6

Head of Third Country Branch

6.1

07/03/2016

This Chapter applies only to a firm that is a third country branch undertaking (other than a Swiss general insurer).

6.2

07/03/2016

The Head of Third Country Branch function (SIMF19) is the function of having responsibility for the conduct of all activities of the third country branch undertaking that are subject to the regulatory system.

6.3

07/03/2016

  1. (1) A third country branch undertaking must have at least one person approved to perform the Head of Third Country Branch function.
  2. (2) If a vacancy arises in respect of the Head of Third Country Branch function, a third country branch undertaking must ensure that it appoints a person to fill that vacancy as soon as possible.

6.4

07/03/2016

third country branch undertaking that transacts with-profits insurance business must have at least one person approved to perform the With-Profits Actuary function (SIMF21).

6.5

07/03/2016

third country branch undertaking is not required to have any person(s) approved to perform any of the other senior insurance management functions.

6A

Head of Small Run-off Firm

6A.1

12/09/2017

This Chapter applies only to a small run-off firm.

6A.2

07/11/2017

The Head of small run-off firm function (SIMF26) is the function of:

  1. (1) having responsibility for the conduct of the regulated activities; or
  2. (2) chairing the governing body

of a small run-off firm.

6A.3

12/09/2017

  1. (1) A small run-off firm must ensure that one or more persons performs the Head of small run-off firm function or the Chief Executive function on its behalf.  
  2. (2) A small run-off firm must ensure that there is a person appointed to the Head of small run-off firm function or the Chief Executive function who has ultimate responsibility for the conduct of the regulated activities of the small run-off firm.
  3. (3) If a vacancy arises in respect of that aspect of the Head of small run-off firm function or the Chief Executive function referred to in (2) above, a small run-off firm must ensure that it appoints a person to fill that vacancy as soon as practicable.

6A.4

12/09/2017

A small run-off firm must have at least one person approved to perform the Chief Finance function (SIMF2).

6A.5

12/09/2017

A small run-off firm that transacts with-profits insurance business must have at least one person approved to perform the With-Profits Actuary function (SIMF21).

6A.6

12/09/2017

A small run-off firm is not required to have any person(s) approved to perform any of the other senior insurance management functions.

7

Chief Actuary

7.1

07/03/2016

The Chief Actuary function (SIMF20) is the function of having responsibility for the actuarial function specified in Conditions Governing Business 6.

8

With-Profits Actuary

8.1

07/03/2016

This Chapter applies only to firms that carry on with-profits insurance business.

8.2

07/03/2016

The With-Profits Actuary function (SIMF21) is the function of having responsibility for advising the governing body of a firm transacting with-profits insurance business on the exercise of discretion affecting part or all of that business, as described more fully in Actuaries 5.1.

9

Chief Underwriting Officer

9.1

07/03/2016

This Chapter applies only to firms that carry on general insurance business and to managing agents.

9.2

07/03/2016

The Chief Underwriting Officer function (SIMF22) is the function of having responsibility, in respect of the firm’s general insurance business, for the underwriting decisions in respect of material insurance risks that:

  1. (1) in relation to firms that carry on general insurance business, are borne by the firm; or
  2. (2) in relation to managing agents, are borne by members.

10

Underwriting Risk Oversight

10.1

07/03/2016

This Chapter applies only to the Society.

10.2

07/03/2016

The Underwriting Risk Oversight function (SIMF23) is the function of overseeing and influencing underwriting plans by managing agents in respect of risks borne by members.

11

Lloyd’s

11.1

07/03/2016

This Part applies to the Society and managing agents separately.

12

UK ISPVs

12.1

07/03/2016

This Chapter applies only to firms that are UK ISPVs.