On 15 July 2022, the Dutch Authority for the Financial Markets (Autoriteit Financiële Markten, AFM) and the Dutch Central Bank (De Nederlandsche Bank, DNB) published for public consultation a draft Decree amending the Suitability Policy Rule 2012 (Besluit tot wijziging van de Beleidsregel Geschiktheid 2012, the Amendment Decree). The Suitability Policy Rule 2012 (Beleidsregel Geschiktheid 2012) clarifies what the AFM and DNB understand ‘suitability’ (geschiktheid) to mean and what aspects are taken into consideration when assessing a policymaker of a financial undertaking. Once amended, the policy rule will be cited as the Suitability Policy Rule 2022.
The AFM and DNB have recently made an inventory of necessary changes to the policy rule, which include changes that are a result of amendments to European and national rules and regulations. Some of the most important changes contained in the Amendment Decree are listed below.
- Authorised (sub-)agents ((onder)gevolgmachtigde agenten) and investment holdings (beleggingsholdings) will be added to group B. As a result, policymakers of authorised (sub-)agents, as well as those of investment holdings, will also be screened for suitability with regard to controlled and sound business operations. In particular in relation to authorised (sub-)agents this is deemed necessary because insurers often outsource important processes to authorised (sub-)agents, such as client acceptance, risk management, collection of premium and claims handling. The knowledge and experience of the policymakers of authorised (sub-)agents may have been acquired while working for a non-financial undertaking, but should be related to the nature of the activities of the authorised (sub-)agent.
- The competences included in the annex to the policy rule, which are used to determine a policymaker’s suitability, will be updated and supplemented. According to the regulators these changes are not substantive changes, but serve to clarify the understanding of competences.
- The scope of group C will be extended to among others advisors and (reinsurance) intermediaries. Some advisors and (reinsurance) intermediaries will fall within the remit of the Digital Operational Resilience Act (DORA), a European regulation with the aim of ensuring that financial-sector ICT systems can withstand security threats. DORA contains specific requirements for the company’s management body in terms of ICT risk management. These specific requirements are covered by the suitability requirements in relation to business operations. Therefore, the policymakers of some advisors and (reinsurance) intermediaries will as part of the suitability screening need to demonstrate that they have knowledge of controlled and ethical business operations in the field of ICT risk management.
The consultation documents can be downloaded on the AFM’s website and on DNB’s website. Instructions on how to submit a response are also provided on these websites. The consultation period ends on 15 September 2022.