The following Insurance & Reinsurance guidance note Produced in partnership with Nicholas Thompsell, Partner of Fieldfisher LLP provides comprehensive and up to date legal information covering:
BREXIT: The UK is leaving the EU on exit day (as defined in the European Union (Withdrawal) Act 2018). This has an impact on this Practice Note. For further guidance, see Practice Note: Impact of Brexit: Solvency II—quick guide.
The requirements on UK insurers concerning the topics of governance, risk management, systems and controls are all interlinked and should be approached in a holistic manner. For an insurer, there is also conceptually an overlap between what may be regarded as governance or systems requirements and what may be regarded as capital or liquidity requirements—but these latter requirements (each a huge topic of itself) are outside the scope of this note.
In the UK, insurers are dual-regulated, with the Prudential Regulation Authority (PRA) taking responsibility for prudential regulation and the Financial Conduct Authority (FCA) taking responsibility for the regulation of business conduct. As a result, the directly applicable rules for UK-based insurers derive principally from:
the threshold conditions which are the minimum requirements that firms must meet at all times in order to be permitted to carry on the regulated activities in which they engage. PRA-authorised firms need to meet both the PRA-specific and FCA-specific threshold conditions
the PRA Rulebook and, in particular, the Conditions Governing Business section for Solvency II firms; the Governance section for Non-Solvency II firms; fundamental
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