Non-Solvency II Firms - Senior Management Functions

1.1

Unless otherwise stated, this Part applies to a small non-directive insurer.

1.2

In this Part, the following definitions shall apply:

Chief Actuary function

has the meaning given in 4.1.

Small Insurer Senior Management function

has the meaning given in 3.1.

With-Profits Actuary function

has the meaning given in 5.1.

2.1

Each of the functions in 3 to 5 is a controlled function and a PRA senior management function.

2.2

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

2.3

To the extent that:

1. (1) a firm appoints an individual who is an employee of the firm to perform a function which, but for this rule, would be a PRA senior management function;
2. (2) the appointment is solely to provide cover for a PRA senior management function holder who is an individual and 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 PRA senior management function does not relate to those activities of that person.

2.3A

In this Chapter, a PRA senior management function holder being absent includes the PRA senior management function holder ceasing to perform their PRA senior management function.

2.3B

1. (1) This rule deals with an appointment by a firm under 2.3 where:
   1. (a) the absence is reasonably unforeseen; or
   2. (b) an absence of over 12 weeks is reasonably unforeseen.
2. (2) If, before the period under 2.3(3) would have expired but for this rule, the firm makes a valid and complete application for the approval for the performance by a person of the PRA senior management function that was performed by the absent PRA senior management function holder:
   1. (a) the period for which the function performed by the temporary replacement is not a PRA senior management function is extended until that application is finally determined; and
   2. (b) the period for which the temporary replacement may perform the function without approval is extended accordingly.
3. (3) An application is finally determined for the purposes of (2) when:
   1. (a) the application is withdrawn;
   2. (b) the PRA grants the application;
   3. (c) where the PRA has refused or not granted the application and the matter is not referred to the Tribunal, when the time for referring the matter to the Tribunal has expired; or
   4. (d) where the PRA has refused or not granted the application and the matter is referred to the Tribunal, when the reference, and any appeal against the Tribunal’s determination has been fully disposed of.
4. (4) The reference to ‘not granted’ in (3)(c) and (d) includes a situation where the PRA has granted an application subject to conditions or for a limited period (or both).

2.4

If, in relation to a firm:

1. (1) a PRA senior management function holder also performs FCA activities, performance of the PRA senior 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 PRA senior 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 an FCA activities notification; and
4. (d) that person performs and is continuing to perform the FCA activities.
2. (2) a PRA senior management function holder has been performing FCA activities in the circumstances set out in (1), and that person:
1. (a) ceases to perform the PRA senior management function;
2. (b) within three months of ceasing performance, is approved to perform a new PRA senior management function at the firm; and
3. (c) continues to perform the FCA activities,

performance of the new PRA senior management function will include the performance of those FCA activities, provided the conditions in (1) (a) to (d) are met.

2.5

If a PRA senior management function holder to whom 2.4 applies ceases to perform a PRA senior management function but continues to perform the FCA activities, 2.4 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 PRA senior management function.

3.1

The Small Insurer Senior Management function (SMF 25) 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 non-directive insurer.

3.2

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

4.1

The Chief Actuary function (SMF 20) is the function of having responsibility for the function specified in Non-Solvency II Firms – Actuarial Requirements 5.1 in relation to a small non-directive insurer.

5.1

The With-Profits Actuary function (SMF 20a) is the function of having responsibility for the function specified in Non-Solvency II Firms – Actuarial Requirements 6.1 in relation to a small non-directive insurer.