What do fit and proper requirements mean?

The requirement has two sides. **Fit** demands that the person has the qualifications, knowledge and experience to perform their role for the **sound and prudent management** of the firm. **Proper** demands **good repute and integrity** — the personal suitability, for example being free of relevant convictions or supervisory measures. Both sides must be met; technical brilliance does not substitute for integrity, and vice versa.

For **insurers** the basis is **Art. 42 of the Solvency II Directive (2009/138/EC)**: persons who effectively run the undertaking or hold other key functions must be fit (para 1(a)) and proper (para 1(b)); the detail sits in Art. 273 of Delegated Regulation (EU) 2015/35. The suitability of members of the administrative, management or supervisory body (AMSB) flows from the same governance system, not from the wording of Art. 42 itself ^[1].

For **banks** the relevant provision is **Art. 91 CRD (Directive 2013/36/EU)**: members of the management body must be of sufficiently good repute and possess sufficient knowledge, skills and experience. The assessment is fleshed out by the **joint ESMA/EBA guidelines on the suitability of members of the management body (EBA/GL/2021/06)** of 2 July 2021, applicable since 31 December 2021 ^[2][3].

Fit and proper is not a one-off check at appointment but an **ongoing** requirement: fitness and propriety must be maintained throughout the term and reassessed on triggers (new mandates, incidents). The rulebook is moving: a joint ESMA/EBA consultation on revised suitability guidelines (EBA/CP/2026/03) opened on 25 February 2026 — not yet binding, but one to watch.