Senior Insurance Managers Regime. an initial assessment of SIMR's introduction

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1 The Senior Insurance Managers Regime an initial assessment of SIMR's introduction 8 June 2016 Various teething problems remain post the Senior Insurance Managers Regime coming into effect on 7 March This paper considers how insurers can approach key issues. It also details upcoming events, and considers the likely effects on insurers of the planned extension of the Senior Managers & Certification Regimes to all regulated firms. Glossary of acronyms APR COCON NDF NED SIF SIMF SIMR SM&CR SoR Form Approved Persons Regime FCA's new Code of Conduct Sourcebook n-directive Firms (insurers that are not subject to the Solvency II Directive) n-executive Directors Why a new regime? Significant Influence Function Senior Insurance Management Function Senior Insurance Managers Regime Senior Managers & Certification Regimes Scope of Responsibilities Form submitted with each application for approval for a PRA SIMF or FCA SIF On 7 March 2016 the PRA introduced the Senior Insurance Managers Regime ("SIMR"), the new regulatory framework for insurance firms. In conjunction with this, the FCA made amendments to the Approved Persons Regime ("APR") to strengthen individual accountability within insurance firms 1. 'If it ain't bust don't fix it' has never been a popular adage amongst regulators. Despite there being no particular evidence that the current regime was failing in the insurance sector, a new framework was necessary to implement Solvency II measures on governance and fitness and propriety (with these elements of the SIMR introduced on 1 January 2016) and to conform to European Insurance and Occupational Pensions Authority guidelines. The PRA was in any case keen to introduce a new regime to further its policy objective of increasing individual accountability, and to bring the regime for insurers more in line with the requirements of the Senior Managers & Certification Regimes ("SM&CR") that have been applied to banks (and which it is now intended will apply more broadly to other types of regulated financial services firms). Accordingly the PRA has introduced its new regime even where the Solvency II Directive applies, although helpfully with a degree 1 The term 'SIMR' is often used to mean both the PRA's SIMR and the FCA's new APR for insurers of proportionality so that: Solvency II firms: SIMR applies in full to UK insurance firms subject to the Solvency II Directive, third country branch undertakings, the Society of Lloyd's and managing agents. n-directive Firms ("NDFs") 2 : Larger NDFs with assets over 25 million are subject to a similar SIMR to Solvency II firms. Small NDFs with fewer assets are subject to a streamlined version of the SIMR. The main differences between the full regime and the NDF regimes are outlined in the below section on 'The Senior Insurance Managers Regime for NDFs'. As a result of the principle of home state supervision, the PRA does not have any jurisdiction over UK branches of an EEA insurer operating under Solvency II. The FCA has supervisory powers in only limited areas as discussed further below. Main elements of the Senior Insurance Managers Regime There are two main aspects of the SIMR. First, it requires insurance firms and groups to have a clearly defined governance structure. Secondly, it seeks to enhance accountability and responsibility, in order to ensure that individual senior managers and directors behave with integrity, honesty and skill. Before considering teething problems, it is useful to re-cap the main elements introduced by the SIMR: Senior Insurance Management Functions The SIMR is focussed on those holding critical high-level roles. As a result fewer individuals come under the remit of the new regime. However, those who are covered by SIMR are likely to face greater scrutiny from the PRA. This narrower set of controlled functions will be known as Senior Insurance Management Functions (SIMFs), 2 NDF firms are those insurance activities excluded from scope in Articles 3-12 of the Solvency II Directive, and including undertakings excluded due to the small size of their insurance operations, limited types of non-life insurance activities, vehicle breakdown cover, fully reinsured mutual undertakings that pursue non-life insurance activities, specified institutions in Member States, limited types of life insurance activities, organisations providing funeral expense cover, and reinsurance conducted or fully guaranteed by a Member State.

2 The Senior Insurance Managers Regime and individuals will require pre-approval by the PRA (and FCA consent) before assuming responsibility for any of these functions. The new SIMR regime expanded the scope of the PRA controlled functions beyond those existing under the APR to produce a more detailed list of functions. A full list of the new SIMFs is contained in Appendix 1. Appendix 2 shows the equivalence of SIMFs (and of the new SIFs introduced by the FCA) to the controlled functions under the old APR. From January 2016 firms have needed to submit a Scope of Responsibilities document with each individual s application for PRA approval. It may be possible for a SIMF to be shared by two people, though only when it is appropriate and justified. Significant Influence Functions Significant Influence Functions ("SIFs") are the functions that replaced those controlled functions under the APR that were not converted to SIMFs. A person requires FCA approval subject to PRA consent before performing a SIF. Appendix 2 shows the equivalence of SIFs to the controlled functions under the old APR. "Key function holders" The term 'key function holder' is taken from Solvency II, and refers to those senior persons who "effectively run the firm" or have responsibility for "other key functions". This means that individuals performing a SIMF or SIF may also be a key function holder - but conversely there may be people who are responsible for a key function who are not an SIMF or SIF. The PRA has allowed insurers two ways to appoint key function holders. A firm could 'grandfather' those individuals already approved under the APR into a SIMR equivalent function, which required submission of a grandfathering notification Form K by 9 February The alternative is to submit a new application containing all information needed to assess if the person is fit and proper, and the information in respect of that person detailed in 5.1 of the 'Insurance - Allocation of Responsibilities' rules in the PRA Handbook 3. An application to be a SIMF or SIF will satisfy the notification requirements as long as it includes this information, whilst for other individuals the firm must submit the new Form M (key function holder notification form). An insurer must notify the PRA of changes to the identity of a key function holder and disclose information to assess whether the new person is fit and proper. Persons performing key functions There may be persons who are performing key functions but are not a key function holder or SIMF or SIF. For these persons the firm is obliged to ensure that they are fit and proper and observe the PRA s conduct standards but is not under any obligation to notify these individuals or to obtain approval for them

3 Prescribed responsibilities The PRA has created a list of 'prescribed responsibilities' each of which must be allocated to an individual who performs one of the following roles: SIMF, SIF or n-executive Director ("NED") (see below section on NEDs). These responsibilities include ensuring that those performing a key function are fit and proper, and leading the development of the insurer's culture and standards. A list of the prescribed responsibilities is set out in the below table. 10 Oversight of the independence, integrity and effectiveness of the firm s policies and procedures on whistleblowing and for ensuring staff who raise concerns are protected from detrimental treatment 11 Oversight of the firm s remuneration policies and practices Must be allocated to one or more NEDs Prescribed responsibility 1 Ensuring that the firm has complied with its obligations to satisfy itself that every person who performs a key function is a fit and proper person 2 Responsibility for overseeing the adoption of the firm s culture in the dayto-day management of the firm 3 Production and integrity of the firm s financial information and its regulatory reporting 4 Management of the allocation and maintenance of the firm s capital and liquidity 5 Development and maintenance of the firm s business model 6 Performance of the firm s Own Risk and Solvency Assessment (ORSA) 7 Induction, training and professional development for all the firm s key function holders (other than members of the governing body) 8 Policies and procedures for the induction, training and professional development for all members of the firm s governing body 9 Responsibility for leading the development of the firm s culture by the governing body as a whole 4 Allocation Must be allocated to a person or persons approved by the PRA Expected that these will be allocated to SIMF 9 Given the nature of the PRA and FCA regimes there is scope for regulatory overlap. If an individual was to perform an FCA SIF and was already approved by the PRA to hold a SIMF, the FCA function would be included with the PRA function. In this situation the Scope of Responsibilities Form submitted with the Form A (application to perform a controlled function) will also need to provide information on the FCA function that an individual is looking to perform. Governance mapping Insurers are now required to draw up and regularly update a Governance Map. These are "living documents" that should depict reporting lines, and the key functions identified by the insurer. Insurers that are part of a group must record the interaction between its management and other group entities. Group-wide governance arrangements must also be mapped. The governance maps need to be regularly updated (at least quarterly) and each Governance Map needs to be retained for at least 10 years. Fitness and propriety: Those individuals performing a SIMF are expected to be fit and proper at all times. Firms must therefore conduct an initial assessment, and also have ongoing assessment. A firm must inform the PRA of any information which would reasonably be material to the assessment of a current or former key function holder's fitness and propriety. New conduct rules The new conduct standards are set out in the Insurance Conduct Standards 4 part of the PRA Rulebook. The standards apply directly to those performing a SIMF or a SIF that is a relevant senior management function as defined in the PRA Rulebook. The new rules are aligned with those under the SM&CR, although the PRA introduced an insurer-specific requirement to pay "due regard to the interests of current and potential future policyholders". The PRA introduced 8 conduct standards. The FCA introduced additional standards of treating customers fairly and observing proper standards of market conduct into its new Code 2

4 The Senior Insurance Managers Regime of Conduct Sourcebook (COCON) 5. FCA Conduct Rules under SIMR The conduct rules under the SIMR are detailed in the following boxes. PRA Conduct Rules under SIMR FCA individual conduct Rule 1 FCA individual conduct Rule 2 You must act with integrity. You must act with due skill, care and diligence. PRA Individual Conduct Standard 1 You must act with integrity. FCA individual conduct Rule 3 You must be open and co-operative with the FCA, the PRA and other regulators. PRA Individual Conduct Standard 2 PRA Individual Conduct Standard 3 You must act with due skill, care and diligence. You must be open and co-operative with the FCA, the PRA and other regulators. FCA individual conduct Rule 4 * FCA individual conduct Rule 5 You must pay due regard to the interests of customers and treat them fairly. You must observe proper standards of market conduct. PRA Senior Insurance Manager Conduct Standard 1 You must take reasonable steps to ensure that the business of the firm for which you are responsible is controlled effectively. FCA SIF conduct Rule 1 You must take reasonable steps to ensure that the business of the firm for which you are responsible is controlled effectively. PRA Senior Insurance Manager Conduct Standard 2 PRA Senior Insurance Manager Conduct Standard 3 PRA Senior Insurance Manager Conduct Standard 4 PRA Senior Insurance Manager Conduct Standard 5 You must take reasonable steps to ensure that the business of the firm for which you are responsible complies with the relevant requirements and standards of the regulatory system. You must take reasonable steps to ensure that any delegation of your responsibilities is to an appropriate person and that you oversee the discharge of the delegated responsibility effectively. You must disclose appropriately any information of which the FCA or the PRA would reasonably expect to have notice. When exercising your responsibilities, you must pay due regard to the interests of current and potential future policyholders in ensuring the provision by the firm of an appropriate degree of protection for their insured benefits. FCA SIF conduct Rule 2 FCA SIF conduct Rule 3 * FCA SIF conduct Rule 4 You must take reasonable steps to ensure that the business of the firm for which you are responsible complies with the relevant requirements and standards of the regulatory system. You must take reasonable steps to ensure that any delegation of your responsibilities is to an appropriate person and that you oversee the discharge of the delegated responsibility effectively. You must disclose appropriately any information of which the FCA or PRA would reasonably expect notice. * FCA conduct rule not previously included in APER n-executive Directors Only those NEDs that are in specified categories of non-executive SIMFs or SIFs are required to be approved. The relevant categories are: Required to be approved by the PRA as SIMFs: Chairman (SIMF9), Senior Independent Director (SIMF14) and Chairs of the Audit (SIMF10), Remuneration (SIMF12) and Risk Committees (SIMF11)

5 Required to be approved by the FCA as SIFs: Chairs of the mination Committee (CF2a) and With- Profits Committee (CF2b) required by the FCA as SIFs. Other NEDs need only be notified to the PRA as being key function holders. The PRA cannot directly apply the conduct standards to notified NEDs as they can to a person performing a SIMF or an SIF. The PRA has though stated that "firms are required to ensure that all persons who perform key functions, which would include members of the board, are fit and proper on an ongoing basis; and the PRA expects firms to consider whether their NEDs have complied with the conduct standards as part of the assessment". Transitional provisions - grandfathering The PRA and FCA included transitional provisions for the move to the SIMR, whereby individuals who were already performing a Controlled Function under the old APR could be 'grandfathered' into the new regime. Firms have until 7 September 2016 to submit Scope of Responsibilities forms ("SoRs") for those grandfathered individuals. Upcoming events under SIMR The transition into SIMR is not yet complete. Summer 2016: 7 Sept 2016: the FCA/PRA policy statement with final rules on regulatory references is expected to be published. Deadline to: - submit Scope of Responsibilities ('SoR') Form for grandfathered SIMFs to PRA. - make available to the FCA SoRs for SIFs. - submit to PRA notification forms for those transitional key function holders not grandfathered to a controlled function, nor seeking approval from the PRA for a SIMF. The Senior Insurance Managers Regime for NDFs (i) Larger NDFs The PRA applied a similar regime to Larger NDFs as under SIMR, as this was deemed proportionate given the greater risk that such firms may present to the objectives of the PRA 6. (ii) Small NDFs the streamlined SIMR The 'streamlined SIMR' applies to NDFs that have assets of 25 million or less. The PRA 7 and FCA 8 recognise that new rules for smaller firms should be proportionate, and therefore the requirements are less taxing for Small NDFs. The main elements of the 'streamlined SIMR' are: Small NDFs need only have one SIMF - the Single Small Insurer Senior Management Function (SIMF 25). This function can include any individual responsible for the conduct of all or part of the regulated activities of a firm, and/or chairing a board of directors or management committee. A Small NDF must have at least one person performing this function. The same fitness and propriety criteria are applied to individuals in a Small NDF as apply for individuals at a Solvency II firm. The same conduct standards are applied to senior managers at Small NDFs as for senior managers at a Solvency II firm. A list of four responsibilities must be allocated to one or more persons in the SIMF 25 (or approved by the FCA in a controlled function that is a 'relevant senior management function 9 ). This allocation of prescribed responsibilities need not be done until 7 March These responsibilities cover the following areas: (i) (ii) (iii) (iv) business plan and management information, financial resources, legal and regulatory obligations, and oversight of proportionate systems and controls, and risk management. 6 See PRA consultation CP26/15: (separate appendices can be found here: and PRA policy statement PS26/15: ps2615.pdf (separate appendices can be found here: 7 see PRA consultation CP12/15: and PRA policy statement PS21/15: See FCA consultation CP15/15: and FCA policy statement PS15/21: policy-statements/ps15-21.pdf 9 These are: CF1 Director Function; CF2a Chair of the nomination committee function; CF2b Chair of the with-profits committee function, CF3 Chief executive function, CF5 Director of unincorporated association function, CF6 Small friendly society function, CF10 Compliance oversight function, CF28 Systems and control function, and CF51 Actuarial conduct function 4

6 The Senior Insurance Managers Regime SIMR teething problems Implementing the SIMR has required much effort on the part of insurers, however on the whole the transition into this new regime has been relatively smooth. There remain some issues that have not yet been ironed out. Two such issues are: Key Function Holders The 'Key Function Holder' concept comes from Solvency II, but the Directive is unclear which functions fall within this term (although it does mention the risk management, compliance, internal audit and actuarial functions). The PRA has not been prescriptive in specifying the 'key functions' that are performed within insurance firms. Instead the PRA requires each insurer to determine those functions performed within the firm that the insurer considers a 'key function'. The effect of this approach has been an uneven application by insurers of this aspect. In the absence of clarity within the Directive, insurers have needed to look to the PRA for guidance as to what should be regarded as 'key function'. This remains important as insurers must submit an application for any further key functions not already grandfathered in before the deadline on 7 September A PRA letter from back in August stated that 'key functions' are those "functions whose operation, if not properly managed and overseen, could potentially lead to significant losses being incurred or to a failure in the ongoing ability of the firm to meet its obligations to policyholders" Since then the PRA has provided some additional guidance. On 31 March 2016 the PRA published Supervisory Statement SS35/15 11, which includes a non-exhaustive list of functions that could be a 'key function'. The PRA had also previously published a Q&A on SIMR 12, which addressed some specific issues raised by firms but certainly did not have answers to everything. An unanswered concern for many insurers is which 'key function(s)' should oversee core responsibilities, which is important as the mismanagement of core responsibilities could have prudential and conduct implications. The position is also confused by the considerable degree of overlap between the list of SIMRs and that of key functions. For example the Head of Internal Audit (SIMF5) would be the same as the Key Function Holder responsible for the mandatory key function of internal audit. The overlapping and confusing proposals have arisen because the PRA is trying to kill two birds with one stone - to transpose the Solvency II regime but also to align the provisions as far as it can with the regime for senior managers in banks. The SIMF 7 function One of the innovations under the new regime was to introduce a new controlled function applicable to senior executives and directors of a parent (or group) company who have a significant influence on the management or conduct of a firm s affairs. The scope of the 'Group Entity Senior Insurance Manager' function is not however entirely clear at present. This function relates to a person in a group role who has significant influence and is involved in making or taking decisions in relation to a UK firm's regulated activities (refer to Schedule 1 for the full description of the role is included in Schedule 1). The idea of this is that the individual must exercise a direct influence over the UK regulated entity and not merely exercise a purely strategic influence. However we understand that the PRA has requested insurers to submit applications for SIMF 7 function for individuals performing a role where they do not actually have this level of significant influence. This wide understanding of the scope of SIMF 7 may later be narrowed by the PRA, however for now insurers will have to bear in mind the current approach when submitting applications. Planned 2018 changes to the SIMR The Senior Managers & Certification Regimes will be extended to all regulated firms from This was announced in HM Treasury's policy paper of October , which explained that the introduction of the SIMR would "pave the way for the application of the SM&CR to insurers". The SIMR and SM&CR have been aligned in many ways, however there are some key differences: senior managers at insurers do not have a statutory requirement to take reasonable steps to prevent regulatory breaches, insurers do not have to comply with the requirements under the certification regime to assess and certify on an annual basis that a person is 'fit and proper' to perform a role capable of "causing significant harm to the firm or its customers", and the conduct requirements only apply to individuals at insurers who perform a controlled function, rather than the wider power under the SM&CR to apply the requirements on any individual who can impact the statutory objectives of the regulator. These differences indicate some of the likely changes for insurers once the SM&CR is extended to all regulated firms. So, whilst implementation details have yet to be published, it is clear that insurers will be affected by this extension

7 Appendix 1: Senior Insurance Management Functions (SIMFs) Function title Description of function Solvency II transposition? SIMF 1 Chief Executive Officer The function of having responsibility, under the immediate authority of the governing body, alone or jointly with others, for carrying out the management of the conduct of the whole of the business (or relevant activities) of a firm SIMF 2 Chief Finance Officer The function of having responsibility for the management of the financial resources of a firm and reporting to the governing body of a firm in relation to its financial affairs SIMF 4 Chief Risk Officer The function of having responsibility for overall management of the risk management system specified in Conditions Governing Business 3 Yes SIMF 5 Head of Internal Audit The function of having responsibility for management of the internal audit function specified in Conditions Governing Business 5 Yes SIMF 7 Group Entity Senior Insurance Manager The function of having a significant influence on the management or conduct of one or more aspects of the affairs of a firm in relation to its regulated activities (other than in the course of the performance of another senior insurance management function) and which is performed by a person employed by, or an officer (other than a non-executive director) of: (i) a parent undertaking or holding company of a firm; or (ii) another undertaking which is a member of the firm s group SIMF 9 (NED) Chairman The function of having responsibility for chairing, and overseeing the performance of the role of, the governing body of a firm SIMF 10 (NED) Chairman Risk Committee The function of having responsibility for chairing, and overseeing the performance of any committee responsible for the oversight of the risk management system specified in Conditions Governing Business 3 (only relevant where this Board committee is required) Yes SIMF 11 (NED) Chairman Audit Committee The function of having responsibility for chairing, and overseeing the performance of any committee responsible for the oversight of the internal audit system specified in Conditions Governing Business 5 (only relevant where this Board committee is required) Yes SIMF 12 (NED) Chairman Remuneration Committee The function of having responsibility for chairing, and overseeing the performance of any committee responsible for the oversight of the design or implementation of the remuneration policy of a firm (only relevant where this Board committee is required) SIMF 14 (NED) Senior Independent Director The function of performing the role of a senior independent director, and having particular responsibility for leading the assessment of performance of the person performing the Chairman function SIMF 19 Head of Third Country Branch The function of having responsibility for the conduct of all activities of the third country branch undertaking that are subject to the regulatory system 6

8 The Senior Insurance Managers Regime Function title Description of function Solvency II transposition? SIMF 20 Chief Actuary The function of having responsibility for the actuarial function specified in Conditions Governing Business 6 Yes SIMF 21 With-Profits Actuary The function of having responsibility for advising the governing body of a firm transacting with-profits insurance business on the exercise of discretion affecting part or all of that business SIMF 22 Chief Underwriting The function of having responsibility for the underwriting decisions in respect of material insurance risks that, in relation to managing agents, are borne by members SIMF 23 Underwriting Risk Oversight The function of overseeing and influencing underwriting plans by managing agents in respect of risks borne by members (applies to Lloyds members only) SIMF 25 (Small NDF function under 'streamlined SIMR') Small Insurer Senior Management The function of having responsibility for the conduct of all or part of the regulated activities, or chairing the governing body, of a small non-directive insurer. 7

9 Appendix 2: SIMR equivalent functions table (from PRA Policy Statement PS22/15) Pre implementation PRA or FCA Controlled Function PRA Senior Insurance Management Function SIF (FCA Function) UK Solvency II firm PRA Director (CF1) Chief Finance function (SIMF 2) Chief Risk function (SIMF 4) Head of Internal Audit function (SIMF 5) Chief Actuary function (SIMF 20) Chief Underwriting Officer function (SIMF 22) Underwriting Risk Oversight function (Lloyd s) (SIMF 23) PRA n executive director (CF2) Chairman (SIMF 9) Senior independent director (SIMF 14) Chair of the Risk Committee (SIMF 10) Chair of the Audit Committee (SIMF 11) Chair of the Remuneration Committee (SIMF 12) FCA Director function (CF1) (see te) Chair of the nomination committee function (CF2a) Chair of the with profits committee function (CF2b) (see te) PRA Chief executive (CF3) Chief Executive function (SIMF 1) PRA Director of unincorporated association (CF5) FCA Apportionment and oversight (CF8) FCA Compliance (CF10) Chief Finance function (SIMF 2) Chief Risk function (SIMF 4) Head of Internal Audit function (SIMF 5) Chief Actuary function (SIMF 20) Chief Underwriting Officer function (SIMF 22) Chairman function (SIMF 9) Chair of the Risk Committee function (SIMF 10) Chair of the Audit Committee function (SIMF 11) Chair of the Remuneration Committee function (SIMF 12) Senior Independent Director function (SIMF 14) FCA Director of unincorporated association function (CF5) Chair of the nomination committee function (CF2a) Chair of the with profits committee function (CF2b) (See te) To be dis applied Compliance (CF10) FCA CASS Operational Oversight (CF10a) CASS Operational Oversight (CF10a) FCA Money Laundering Reporting (CF11) Money Laundering Reporting Officer (CF11) 8

10 The Senior Insurance Managers Regime Pre implementation PRA or FCA Controlled Function PRA Senior Insurance Management Function SIF (FCA Function) PRA Actuarial function holder (CF12) Chief Actuary function (SIMF 20) PRA With profits Actuary (CF12A) With profits Actuary function (SIMF 21) PRA Lloyd s Actuary (CF12B) Chief Actuary function (SIMF 20) Underwriting Risk Oversight function (SIMF 23) PRA Systems and Controls (CF28) Chief Finance function (SIMF 2) Chief Risk function (SIMF 4) Head of Internal Audit function (SIMF 5) FCA Significant Management (CF29) Chief Underwriting Officer function (SIMF 22) Chief Actuary function (General Insurance Firms) (SIMF 20) Underwriting Risk Oversight function (Lloyd s) (SIMF 23) FCA Customer function (CF30) CF29s not otherwise approved by the PRA Customer function (CF30) UK Insurance Special Purpose Vehicle PRA Director (CF1) Chief Finance function (SIMF 2) Chief Actuary function (SIMF 20) FCA Director function (CF1) (see te) PRA n executive director (CF2) Chairman (SIMF 9) Chair of the nomination committee function (CF2a) Chair of the with profits committee function (CF2b) (see te) PRA Chief executive (CF3) Chief Executive function (SIMF 1) FCA Apportionment and oversight (CF8) FCA Compliance (CF10) FCA CASS Operational Oversight (CF10a) FCA Money Laundering Reporting (CF11) PRA Actuarial function holder (CF12) Chief Actuary function (SIMF 20) To be dis applied Compliance (CF10) CASS Operational Oversight (CF10a) Money Laundering Reporting Officer (CF11) PRA Systems and Controls (CF28) Chief Finance function (SIMF 2) FCA Systems and Controls function (CF28) (see te) FCA Significant Management (CF29) FCA Customer function (CF30) Chief Actuary function (General Insurance Firms) (SIMF 20) CF29s not otherwise approved by the PRA Customer function (CF30) 9

11 Pre implementation PRA or FCA Controlled Function PRA Senior Insurance Management Function SIF (FCA Function) Third country branch undertaking PRA Director (CF1) Head of Third Country Branch function (SIMF 19) Chief Finance function (SIMF 2) Chief Risk function (SIMF 4) Head of Internal Audit function (SIMF 5) Chief Actuary function (SIMF 20) Chief Underwriting Officer function (SIMF 22) FCA Director function (CF1) (see te) PRA n executive director (CF2) Chairman (SIMF 9) Senior independent director (SIMF 14) Chair of the Risk Committee (SIMF 10) Chair of the Audit Committee (SIMF 11) Chair of the Remuneration Committee (SIMF 12) PRA Chief executive (CF3) Head of Third Country Branch function (SIMF 19) FCA Apportionment and oversight (CF8) FCA Compliance (CF10) FCA CASS Operational Oversight (CF10a) FCA Money Laundering Reporting (CF11) PRA With profits Actuary (CF12A) With profits Actuary function (SIMF 21) PRA Systems and Controls (CF28) Chief Finance function (SIMF 2) Chief Risk function (SIMF 4) Head of Internal Audit function (SIMF 5) FCA Significant Management (CF29) Chief Underwriting Officer function (SIMF 22) FCA Customer function (CF30) To be dis applied Compliance (CF10) CASS Operational Oversight (CF10a) Money Laundering Reporting Officer (CF11) Systems and controls (CF28) Significant Management (CF29) Customer function (CF30) te: See SUP TP R in the FCA Handbook 10

12 Contacts Nicholas Thompsell Partner - London E: nicholas.thompsell@fieldfisher.com T: +44 (0) Kirstene Baillie Partner - London E: kirstene.baillie@fieldfisher.com T: +44 (0) John Dooley Solicitor - London E: john.dooley@fieldfisher.com T: +44 (0) This publication is not a substitute for detailed advice on specific transactions and should not be taken as providing legal advice on any of the topics discussed. Copyright Fieldfisher LLP All rights reserved. Fieldfisher LLP is a limited liability partnership registered in England and Wales with registered number OC318472, which is regulated by the Solicitors Regulation Authority. A list of members and their professional qualifications is available for inspection at its registered office, Riverbank House, 2 Swan Lane, London, EC4R 3TT. We use the word partner to refer to a member of Fieldfisher LLP, or an employee or consultant with equivalent standing and qualifications. Brussels / Du sseldorf / Hamburg / London / Manchester / Munich / Paris / Shanghai / Silicon Valley / fieldfisher.com