Prudential Regulation Authority Rulebook

4.1

This Chapter only applies to a non-directive insurer that is also a non-directive friendly society.

4.2

A firm must take reasonable steps to ensure that it does not carry on activities beyond its powers.

4.3

A firm must take reasonable steps to ensure that it and its registered branches comply with:

(1) any requirements of or under the Friendly Societies Act 1992 or FSMA which relate to the conduct of its insurance business; and

(2) any requirement which is otherwise applicable to its insurance activities.

4.4

A firm must supervise the activities of any:

(1) subsidiary;

(2) jointly controlled body; and

(3) registered branch of the firm;

with due care and diligence, having due regard to the interests of its policyholders and without detriment to the conduct of the firm’s activities.

4.5

A firm must ensure that every jointly controlled body and registered branch complies with:

(1) 2.2 or 3.2, whichever is applicable; and

(2) any applicable requirements of FSMA and the Friendly Societies Act 1992.

4.6

A firm must and must procure that each registered branch:

(1) keeps adequate accounting records; and

(2) establishes and maintains adequate systems of control of its business and records and of inspection and reporting.

4.7

A firm must ensure that the systems of control and of inspection and reporting are adequate to enable the governing body to properly discharge:

(1) the duties imposed on it by or under FSMA, the Friendly Societies Act 1992 or the Friendly Societies Act 1974; and

(2) the functions of direction of the affairs of the friendly society or registered branch.

No such system of control will be treated as adequate unless there is kept available to the governing body a detailed statement in writing of the system as in operation for the time being.

4.8

A firm must ensure that the systems of control and of inspection and reporting ensure that its:

1. (1) activities are conducted; and
2. (2) records that are kept are:
1. (a) sufficiently accurate; and
2. (b) available when required,

to enable the governing body to discharge its duties and functions.

4.9

A firm must within the period of 6 months beginning with the end of each financial year make and send to the PRA a statement of their opinion whether the requirements of 4.6 to 4.8 have been complied with in respect of that year by the firm and the statement must be signed by the chairman on behalf of the governing body and by the chief executive.