LMA helps managing agents prepare for SIMR
Managing agents have received new guidance from the Lloyd's Market Association (LMA) on how to prepare for the proposed UK Senior Insurance Managers Regime (SIMR).
Stakeholders in the industry had initially voiced concerns that the SIMR, which replaces the Approved Persons Regime from 1 January 2016, would simply transpose the supervisory requirements applied to the banking industry to insurance.
But the Prudential Regulation Authority went some way to assuage insurers' fears in February, confirming that the potential criminal sanctions available under the banking regime and the "presumption of responsibility" rules would not apply to insurers.
In a document released last week (2 July), the LMA explained that the proposed SIMR was a complex framework and markedly different to the current regime.
LMA senior executive for UK and international regulations Steve Morrell said that the initial guidance was designed to offer a simplified explanation of the rules and provided practical tips for implementation. "Many of the new rules will not be finalised until the regulators publish their final joint policy statement in late July to early August," he said.
"Managing agents will need to assess the final rules in the context of their own organisations and structures when they are published."
The LMA guidance arrives on the back of Lloyd's chief risk officer and general counsel Sean McGovern saying that the SIMR was something the industry had to grapple with in an EU that was all too enthusiastic to regulate.
Speaking at the Reactions London Market Conference last month, McGovern told attendees that the SIMR demonstrated the "continual desire to do more and create more and more individual accountability".
"That creates cost, burden, and becomes part of the narrative about London not being an attractive place to locate your capital," he said.