Prudential Regulation Authority Rulebook

1.1

Unless otherwise stated, this Part applies to:

1. (1) a large non-directive insurer; and
2. (2) a Swiss general insurer.

1.2

In this Part, the following definitions shall apply:

management responsibilities map

has the meaning given in 5.1.

prescribed responsibility

1. (1) for a firm (other than a Swiss general insurer) means the responsibilities in 3.1 and 3.2;
2. (2) for a Swiss general insurer means the responsibilities set out in 3.1 to the extent only that they are relevant to the activities of the firm carried on from a branch in the UK.

Swiss general insurer prescribed responsibility

means the responsibilities in 3A.2.

2.1

A firm (other than a Swiss general insurer) must allocate each of the prescribed responsibilities set out in 3.1 (other than 3.1(9) and (10)) to one or more persons who, in relation to that firm, are approved under section 59 of FSMA by:

1. (1) the PRA to perform a PRA senior management function; or
2. (2) in relation to relevant senior management functions only, the FCA.

2.2

A firm (other than a Swiss general insurer) must allocate each of the prescribed responsibilities set out in 3.1(9) and (10) and the prescribed responsibility set out in 3.2, if applicable to one or more non-executive directors who perform:

1. (1) a PRA senior management function set out in Large Non-Solvency II Firms – Senior Insurance Management Functions 4; or
2. (2) an FCA governing function at that firm.

2.3

A Swiss general insurer must allocate each of the prescribed responsibilities set out in 3.1(A1) to 3.1(1) and each of the Swiss general insurer prescribed responsibilities to one or more persons who, in relation to that firm, are approved under section 59 of FSMA by:

1. (1) the PRA to perform a PRA senior management function; or
2. (2) in relation to the relevant senior management function only, the FCA.

2.4

A firm must ensure that any responsibilities allocated to, and that form part of the responsibilities of, a person who performs a PRA senior management function in relation to the firm are consistent with the scope of that PRA senior management function and of any prescribed responsibilities, FCA responsibilities and other responsibilities allocated to that person.

3.1

Each of the responsibilities set out in this rule is a prescribed responsibility:

1. (A1) responsibility for the firm’s performance of its obligations under the senior management regime (PR A);
2. (A2) responsibility for the firm’s performance of its obligations under the certification regime (PR B);
3. (A3) responsibility for compliance with the firm’s obligations in relation to its management responsibilities map (PR C);
4. (1) responsibility for ensuring that the firm has complied with its obligations in Large Non-Solvency II Firms - Fitness and Propriety to:
1. (a) ensure that every person who performs a key function but does not also perform a PRA senior management function or a certification function is a fit and proper person; and
2. (b) provide and obtain regulatory references (PR U);
5. (2) responsibility for leading the development of the firm’s culture by the governing body as a whole (PR I);
6. (3) responsibility for overseeing the adoption of the firm’s culture in the day-to-day management of the firm (PR H);
7. (4) responsibility for the production and integrity of the firm’s financial information and its regulatory reporting (PR Q);
8. (5) responsibility for management of the allocation and maintenance of the firm’s:
1. (a) capital; and
2. (b) liquidity (PR O);
9. (6) responsibility for the development and maintenance of the firm’s business model by the governing body (PR T);
10. (7) responsibility for leading the development and monitoring effective implementation of policies and procedures for the induction, training and professional development of all members of the firm’s governing body (PR F);
11. (8) responsibility for monitoring effective implementation of policies and procedures for the induction, training and professional development of all of the firm’s key function holders (other than members of the firm’s governing body) (PR G);
12. (9) responsibility for oversight of the independence, autonomy and effectiveness of the firm’s policies and procedures on whistleblowing including the procedures for protection of staff who raise concerns from detrimental treatment (PR N);
13. (10) responsibility for overseeing the development and implementation of the firm’s remuneration policies and practices (PR M); and
14. (11) responsibility for the firm’s performance of its obligations in respect of outsourced operational functions under Non-Solvency II Firms – Governance 5 (PR X).

3.2

The responsibility set out in rule 3.2(1) is a prescribed responsibility in the circumstances specified:

1. (1) if a firm 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), responsibility for providing for an effective internal audit function in accordance with Non-Solvency II Firms – Governance 9.2 and for overseeing the performance of the internal audit function (PR J2).

3A.1

This Chapter applies only to a Swiss general insurer in respect of the activities of the firm carried on from a branch in the UK.

3A.2

Each of the responsibilities set out in this rule is a Swiss general insurer prescribed responsibility:

1. (1) responsibility for management of the firm’s risk management processes in the UK (PR AA);
2. (2) responsibility for the firm’s compliance with the UK regulatory system applicable to the firm (PR FF);
3. (3) responsibility for the escalation of correspondence from the PRA, FCA and other regulators in respect of the firm to each of the governing body or the management body of the firm and, as appropriate, the firm’s parent undertaking and the ultimate parent undertaking of the firm’s group (PR EE); and
4. (4) responsibility for management of the firm’s systems and controls in the UK (PR BB).

4.1

A firm must identify:

1. (1) each of the functions that the firm considers to be a key function; and
2. (2) any such key function that amounts to effectively running the firm.

4.2

A firm must keep its identification of key functions pursuant to 4.1 up-to-date.

4.3

A firm must keep a record of its reasoning for the identification of key functions pursuant to 4.1.

5.1

A firm must have and maintain a management responsibilities map, which is a clear and coherent document or series of documents with the following details:

1. (1) a list of the key functions identified by the firm in accordance with 4.1 highlighting those that amount to effectively running the firm;
2. (2) the names of the persons who effectively run the firm or who are responsible for other key functions listed pursuant to 5.1(1);
3. (3) for each person named pursuant to 5.1(2), a summary of the significant responsibilities allocated to that person (including, if applicable, any prescribed responsibilities that have been allocated to that person in accordance with 2);
4. (4) where any responsibilities covered by 5.1(3) are allocated to more than one person, details of how those responsibilities are shared or divided between the persons concerned;
5. (5) reporting lines and lines of responsibility for each person listed pursuant to 5.1(2);
6. (6) where a firm is a member of a group:
1. (a) how the firm’s management and governance arrangements fit together with those of its group and the extent to which the firm’s management and governance arrangements are provided by or shared with other members of its group; and
2. (b) for the persons listed pursuant to 5.1(2), details of the reporting lines and the lines of responsibility (if any) to persons who are employees or officers of other group members or to committees or other bodies of the group or of other group members;
7. (7) matters reserved to the governing body (including the terms of reference of its committees) including, in the case of a Swiss general insurer, the equivalent body (or its committees) responsible for the management of the Swiss general insurer’s business and activities in the UK.

5.2

A firm must update the management responsibilities map:

1. (1) at least quarterly; and
2. (2) in the event of a significant change to:
1. (a) the firm’s governance structure;
2. (b) the significant responsibilities allocated to a key function holder; or
3. (c) the reporting lines or lines of responsibility for a key function holder.

5.3

A firm must, as soon as reasonably practicable, provide the following to the PRA:

1. (1) upon request by the PRA, a copy of the management responsibilities map; and
2. (2) in the event of an update pursuant to 5.2(2), a copy of the relevant part of the management responsibilities map.

5.4

A firm must keep an up-to-date record of the statement of responsibilities of each key function holder.

5.5

A statement of responsibilities form, where it is kept and maintained on behalf of a key function holder, will satisfy the requirement in 5.4.

5.6

The record in 5.4, and each updated version, must be signed by the key function holder and an appropriate representative of the firm.

5.7

Where a firm amends its management responsibilities map to show changes in a person’s responsibilities it must also ensure that:

1. (1) the person concerned is informed in writing of the changes; and
2. (2) the record in 5.4 is amended to show the changes.

5.8

Each version of both the management responsibilities map and the record in 5.4 must be retained for a period of six years from the date on which it was superseded by a more up-to-date record, and must be provided to the PRA on request.

5.9

[Not currently used.]

5.10

A firm must comply with 5.8 in relation to any record created in accordance with SYSC 2.2.1R of the PRA Handbook as at 31 December 2015.