Insurers, get ready to put your governance under the microscope. The Financial Conduct Authority (FCA) will be extending its Senior Managers and Certification Regime (SM&CR) to the insurance industry by the end of 2018. It will replace the Senior Insurance Managers Regime (SIMR). Compared with SIMR, SM&CR will challenge insurers to think more critically about their governance arrangements. But don’t worry, time is on your side for now.
During this critical thinking process, we recommend that insurers view it as an opportunity to reflect on and improve their own culture and their governance arrangements.
So, how best to proceed? Well, insurers should be thinking about the key controls and processes they need to put in place to bring about this change. This regulation holds Senior Managers to account, which means they will need to overcome the operational challenges in overseeing their employees, and more closely monitoring their behaviours and activities. Worth noting: some employees will also be accountable under the new regime.
Naturally, we don’t underestimate this task. You may need to implement some creative and innovative solutions. Also, from our experience of the SM&CR regulation for banks, identifying accountability and determining who’s responsible for what all takes time to work out. Inclusive training is a must, so you need to factor it in.
Are you ready for SM&CR? If not, you could face personal liability if something in your area of responsibility goes wrong. Get in touch for an initial discussion.