Approved persons – “ An onerous process
of the rationale the firm has used to conclude that the candidate is fit and proper to perform the role. So, it can be quite an onerous process, and the FSA have three months from the date they have received all the information to deal with the actual application. In reality, many applications are dealt with in a short timescale, providing there is nothing adverse in the application, and the firm is seen as “low risk”, which will be the case for the majority of insurance brokers.
And finally...
I would recommend a review of this area with your compliance consultant to ensure that all directors or partners have been formally approved by the FSA. If there are any individuals that require approval, applications should be submitted as a priority. It is a breach of FSA rules and Principle Eleven to have
individuals performing a controlled function who are not approved. See
www.rwagroup.co.uk
” “ Everyone is expected to know what’s going on “Approved Person”
An Approved Person is someone who is approved to perform a controlled function for an authorised firm. In order to be approved, an individual must:-
1. satisfy the FSA that they can meet, and maintain, the criteria for approval (the fit and proper test)
2. perform their controlled function in accordance with the Statements of Principle and Code of Practice for Approved Persons.
Controlled Functions
These are roles for a regulated business that have a particular regulatory significance. For example, a governing function such as being a director of a firm, or a required function such as overseeing the firm’s systems and controls, or being responsible for compliance with the FSA’s rules. No firm will need all the controlled functions available as there are different
controlled functions relevant to different regulated businesses.
The fit and proper test
This is not an exam that has to be passed. It is a benchmark used to assess an individual’s suitability to perform a controlled function. The most important considerations are the individual’s:-
• Honesty, integrity and reputation • Competence and capability • Financial soundness
For a general insurance broker, we are usually looking at CF1 - Director
CF2 - Non Executive director CF3 - Chief Executive CF4 - Partner
”
JUNE 2010 insurancepeople 19
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