PS18/16: The Duty of Responsibility for insurers and FCA solo-regulated firms

We have set out how we will apply the Duty of Responsibility to insurers and FCA solo-regulated firms.

Read PS18/16 (PDF)[2]

The Duty of Responsibility

Since May 2016, the Duty of Responsibility has applied to Senior Managers of banking firms. It will also apply to Senior Managers of insurers and FCA solo-regulated firms when the Senior Managers and Certification Regime is extended.

Under the Duty of Responsibility, we can take enforcement action against Senior Managers if:

• there was a contravention of a relevant requirement by the Senior Manager’s firm
• at the time of the contravention or during any part of it, the Senior Manager was responsible for the management of any of the firm’s activities in relation to which the contravention occurred
• the Senior Manager did not take such steps as a person in their position could reasonably have been expected to take to avoid the contravention occurring or continuing

This paper sets out how we will apply the Duty of Responsibility to insurers and solo-regulated firms once the Senior Managers and Certification Regime is extended.

Who this applies to

This Policy Statement is relevant to insurers, FCA solo-regulated firms and the senior management of both.

Consumers may be interested in how our approach sits within our initiative to improve culture and governance in firms.

Next steps

Firms should start preparing for commencement of the SM&CR which shall begin on:

• 10 December 2018 for dual-regulated insurers
• 9 December 2019 for solo-regulated firms

Firms should read the Policy Statement alongside the rules for how we will extend the Senior Managers and Certification Regime. We have also published Guides to the Senior Managers and Certification Regime for firms. These summarise of our final rules and guidance on the SM&CR, including the Duty of Responsibility.

• Guide to the Senior Managers and Certification Regime for Insurers[3]
• Guide to the Senior Managers and Certification Regime for Solo-regulated firms[4]