Operational risk requirements for insurers

Copyright © 2025 LexisNexis
Published by a LexisNexis Financial Services expert
Practice notes

Operational risk requirements for insurers

Copyright © 2025 LexisNexis

Published by a LexisNexis Financial Services expert

Practice notes
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This Practice Note looks at the Requirements of chapter 13 of the Financial Conduct Authority (FCA)'s Senior Management Arrangements, Systems and Controls sourcebook (SYSC 13) and provides guidance to insurers when establishing and maintaining systems and controls in relation to the management of operational risk. This Practice Note should be read in conjunction with Practice Note: Prudential requirements for UK insurers—Pillar 2 and Pillar 3 requirements, which describes operational risk requirements under the UK’s Solvency II regime.

Purpose of SYSC 13

The purpose of SYSC 13 is to provide guidance on how to interpret SYSC 3.1.1 R and SYSC 3.2.6 R, which deal with the establishment and maintenance of systems and controls in relation to the management of operational risk. The chapter covers systems and controls for managing risks concerning any of a firm's operations. It does not cover systems and controls for managing credit, market, liquidity and insurance risk.

Firms should also consider the requirements for operational risk contained in the FCA’s Conduct of Business sourcebook (COBS) and SYSC 14.

Application of SYSC 13

SYSC

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
risk definition
What does risk mean?

any reasonably identifiable circumstance or event having a potentially adverse effect on the security of network and information systems

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