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Looking for the PRA's consultation on Senior Insurance Managers regime including the prominence given to company culture
The Prudential Regulation Authority’s consultation paper “Senior insurance managers regime: a new regulatory framework for individuals” has been drawn up as a result of Solvency II and of the PRA’s belief that those who run regulated firms should have defined responsibilities and should behave with integrity, honesty and skill. The paper, which relates to insurance-based entities recognises that the governance regime may be different for banks and insurance firms although these entities share many areas in common.
The proposals contain some interesting initiatives including a ‘Governance Map’ which is designed to clearly set out key responsibilities within the firm, the names of those responsible for those key areas and relevant reporting lines. In an acknowledgement of the importance of organisational culture as a driver of business integrity, in addition to areas such as allocation and maintenance of the firm’s capital and liquidity key areas identified within the consultation include:
The need for diversity is also covered within the proposals. The PRA is looking for the board to have “a mix and balance of skills so that collectively it can understand the breadth of the business” and the consultation document states that it will take this mix into account when considering applications. There have been numerous speeches from the regulators about the importance of culture and diversity but when these are included as elements of a reporting and regulatory framework then organisations can no longer ignore the importance of culture in corporate life.