Senior managers within insurance companies can be held to account for misconduct that falls within their area of responsibility from today under new rules launched by the Financial Conduct Authority.
The Senior Insurance Managers Regime and the Senior Managers Regim, which covers the banking sector, both come into force today, holding individuals working at all levels within firms to standards of conduct.
The new rules follow the June 2013 Parliamentary Commission for Banking Standards (PCBS) report “Changing Banking for Good”, which set out recommendations for legislative and other action to improve professional standards and culture in the UK banking industry.
This was followed by legislation in the Banking Reform Act 2013. The launch of the new regime by the Prudential Regulation Authority and Financial Conduct Authority implements the recommendations made by the PCBS.
The FCA and PRA will apply key principles of the Senior Managers Regime to senior members of staff in both regulators. The regulators have today published an explanation of how they will be applying the regime internally. This includes a description of the core responsibilities of those carrying out senior management functions.
FCA acting chief executive Tracey McDermott says: “Today marks the beginning of a new era of increased individual accountability. The senior managers regime is not designed to re-invent the way that firms organise themselves but to reflect and ensure clarity about how this operates in practice.
“We are determined to embed a culture of personal responsibility within the banking sector.
We hold ourselves to the highest professional standards and so we have decided to apply the fundamental principles of the regime to our senior staff.
“By building on our existing framework of accountability, we will further bolster the transparency with which we are run, and reinforce the standards to which we hold ourselves.”