SUP 16.23A Employers’ Liability Register compliance reporting

Application

SUP 16.23A.1R
  1. (1)

    1This section applies to any firm required to produce an employers’ liability register in compliance with the requirements in ICOBS 8.4.4R, which is:

    1. (a)

      a firm carrying out contracts of insurance, or a managing agent managing insurance business, including in either case business accepted under reinsurance to close, which includes United Kingdom commercial lines employers’ liability insurance; and

    2. (b)

      an incoming EEA firm or incoming Treaty firm falling within (a), including those providing cross border services.

  2. (2)

    In this section:

    1. (a)

      a “director’s certificate” refers to a statement complying with the requirements in SUP 16.23A.5R(1);

    2. (b)

      employers’ liability insurance” includes business accepted under reinsurance to close covering employers’ liability insurance (including business that is only included as employers’ liability insurance for the purposes of this section);

    3. (c)

      a “qualified director’s certificate” refers to the statement complying with the requirements in SUP 16.23A.5R(1)(b);

    4. (d)

      “materially compliant” has the meaning in SUP 16.23A.5R;

    5. (e)

      the “register” is the employers’ liability register complying with the requirements in ICOBS 8.4.4R and ICOBS 8 Annex 1;

    6. (f)

      the “return” is the employers’ liability register compliance return at SUP 16 Annex 44AR; and

    7. (g)

      “supporting documents” are the director’s certificate and auditor’s report specified in SUP 16.23A.5R and SUP 16.23A.6R.

Purpose

SUP 16.23A.2G

1ICOBS 8.4.4R requires a firm to produce the register. The register must be produced in compliance with the updating requirements in ICOBS 8.4.11R(2). SUP 16.23A sets out further requirements on the firm to obtain and submit to the FCA a statement that the firm’s production of the register complies with the requirements in ICOBS 8.4.4R, including supporting documents from a director and an auditor. It specifies the time, form and method of providing that information.

Reporting requirement

SUP 16.23A.3R
  1. (1)

    1A firm must submit the return annually to the FCA.

  2. (2)

    The return must be in relation to the register as at 31 March, covering the period of production of the register from 1 April to 31 March.

  3. (3)

    The return must be submitted online through the appropriate systems made available by the FCA:

    1. (a)

      between the 1 and 31 August each year;

    2. (b)

      in the format set out in SUP 16 Annex 44AR; and

    3. (c)

      any supporting documents must be provided in pdf format.

Content of return and supporting documents

SUP 16.23A.4R

1The return consists of the information required in the form at SUP 16 Annex 44AR and the supporting documents specified in SUP 16.23A.5R and SUP 16.23A.6R.

Director’s certificate

SUP 16.23A.5R
  1. (1)

    1A firm must obtain and submit to the FCA a written statement, by a director of the firm responsible for the production of the register, that, to the best of the director’s knowledge, during the reporting period the firm in its production of the register is either:

    1. (a)

      materially compliant with the requirements of ICOBS 8.4.4R(2) and ICOBS 8 Annex 1, including (where necessary) how the firm has used and continues to use its best endeavours in accordance with ICOBS 8 Annex 1.1.1CR; or

    2. (b)

      not materially compliant with the provisions referred to in SUP 16.23A.5R(1)(a), in which case the statement must also set out, to the best of the director’s knowledge, the information required by SUP 16.23A.5R(3).

  2. (2)

    For the purposes of SUP 16.23A.5R and SUP 16.23A.6R, “materially compliant” means that in relation to at least ninety-nine percent of policies for which information is required to be included, the information in the register does not contain any inaccuracy or lack faithful reproduction (as relevant) that would affect the outcome of a search when compared to a search carried out with fully accurate and/or faithfully reproduced information.

  3. (3)

    The information referred to in SUP 16.23A.5R(1)(b) is:

    1. (a)

      a description of the ways in which the firm, in its production of the register, is not materially compliant;

    2. (b)

      the number of policies, in relation to which, either:

      1. (i)

        the firm is not able to include any information in the register; and/or

      2. (ii)

        information is included in the register but information may be incorrect or incomplete,

    in each case as a proportion of the total number of policies required to be included in the register;

    1. (c)

      where the firm is only practicably able to provide an estimate of the numbers in SUP 16.23A.5R(3)(b), the basis of each estimate; and

    2. (d)

      a description of the systems and controls used in the production of the register and of the steps, together with relevant timescales, that the firm is taking to ensure that it will be materially compliant as soon as practicable.

  4. (4)

    The firm must ensure that the director’s certificate includes the description of “materially compliant” referred to in SUP 16.23A.5R(2).

SUP 16.23A.5AG

1In relation to the written statement referred to in SUP 16.23A.5R(1):

    1. (a)

      SUP 16.23A.5R(1) does not preclude the relevant director from, in addition, including in the director’s statement any of the following as relevant:

      1. (i)

        if a firm’s employers’ liability register is more than materially compliant, a statement to this effect, and/or a statement of the extent to which the director considers, to the best of their knowledge, the firm to be compliant in its production of the register;

      2. (ii)

        reasons for the level of any non-compliance; and/or

      3. (iii)

        information relating to policies which are not required to be included in the register;

    2. (b)

      the statement regarding the firm’s level of compliance with the requirements in ICOBS 8.4.4R(2) and ICOBS 8 Annex 1, and, in relevant cases, the steps the firm is undertaking to ensure material compliance as soon as practicable, does not alter the underlying requirement that the firm has to comply fully with the relevant requirements in ICOBS 8.4.4R(2) and ICOBS 8 Annex 1 (that is, not just to a material extent). So, it is possible that a firm will be able to comply with SUP 16.23A.5R(1) but continue to not fully comply with the underlying requirements, for example in respect of the policies falling outside the ninety-nine percent threshold. In relation to these policies, as well as those identified in any qualified director’s certificate, the firm will need to remedy errors or omissions as soon as practicable, and have systems and controls in place to give effect to these on an ongoing basis.

Auditor’s report

SUP 16.23A.6R
  1. (1)

    1A firm must obtain and submit to the FCA a report satisfying the requirements of SUP 16.23A.6R(2), prepared by an auditor satisfying the requirements of SUP 3.4 and SUP 3.8.5R to 3.8.6R, and addressed to the directors of the firm.

  2. (2)

    The report referred to in SUP 16.23A.6R(1) must:

    1. (a)

      be prepared on the basis of providing an opinion under a limited assurance engagement confirming whether the auditor has found no reason to believe that the firm, solely in relation to the firm’s extraction of information from its underlying records, has not materially complied with the requirements in ICOBS 8.4.4R(2) and ICOBS 8 Annex 1 in the production of its employer’s liability register during the reporting period, having regard in particular to the possible errors and omissions referred to in SUP 16.23A.6R(2)(c) below;

    2. (b)

      use the description of “material compliance” as referred to in SUP 16.23A.5R(2), adapted as necessary to apply solely to the firm’s extraction of information from its underlying records;

    3. (c)

      address, in particular, the following risks:

      1. (i)

        information relating to certain policies issued or renewed on or after 1 April 2011 is entirely omitted from the register even though some relevant policy details are included in the firm’s underlying records;

      2. (ii)

        information relating to certain policies in respect of which claims were made on or after 1 April 2011 is entirely omitted from the register even though some relevant policy details are included in the firm’s underlying records;

      3. (iii)

        relevant information required to be included in the register, and which is included in the firm’s underlying records, is omitted from, or is inaccurately entered on to, the register; and

      4. (iv)

        information relating to policies which do not provide employers’ liability insurance are included in the register.

SUP 16.23A.7R

1For the purposes of SUP 16.23A.5R(1) and SUP 16.23A.6R(1) the director’s certificate and report prepared by an auditor must be obtained and submitted to the FCA within the timeframe set out in SUP 16.23A.3R(3)(a) and in the format set out in SUP 16 Annex 44AR.