Financial & Regulatory

Sunderland Marine and NorthStandard Limited (NorthStandard)

Sunderland Marine is a trading name of the S&P Global ‘A’ rated marine mutual NorthStandard Limited or North of England P&I DAC.

NorthStandard Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.  NorthStandard also operates two licensed branches in Australia and New Zealand, which offer our products under the Sunderland Marine trading name.

Sunderland Marine’s business in the EEA is underwritten by North of England P&I Designated Activity Company, a wholly-owned subsidiary of NorthStandard incorporated in Ireland and regulated by the Central Bank of Ireland.

Financial

US Foreign Account Tax Compliance Act (FATCA)

FATCA is designed to increase transparency for the US tax authorities in relation to US persons earning income through non-US institutions. FATCA imposes withholding tax obligations where required reporting obligations are not met. To support FATCA compliance, our FATCA Forms can be viewed on the NorthStandard, formerly North’s website.

Solvency Disclosures: New Zealand

NorthStandard Limited (NorthStandard) has calculated its solvency margin at 20^th February 2025 as required by the UK Prudential Regulation Authority (NorthStandard Solo).  NorthStandard is also required to produce a calculation for its Group (NorthStandard Group) and has done so as at 20^th February 2025.

The actual solvency capital for NorthStandard at 20^th February 2025 is NZ$820.8 million.  The minimum solvency capital requirement is calculated using a risk based approach as NZ$351.7 million.  The solvency margin, being actual solvency capital in excess of the minimum solvency capital requirement, is NZ$469.1 million and the solvency ratio is 233%.

Ratings

NorthStandard Limited has an ‘A’ credit rating from the financial rating agency S&P Global.

Ratings are given between AAA – D.

For more information on S&P Global, please visit.

North Standard: CPS 511 Disclosure Analysis

1. Remuneration Framework

– 1.1 Main Bodies that Oversee Remuneration

The NorthStandard Limited Board (Board) delegates responsibility for remuneration oversight to the Group Nominations & Remuneration Committee (Committee).

The Committee has three scheduled meetings per year and meets on an ad hoc basis when needed. The Committee consists of a minimum of three members, all of whom are required to hold non-executive director positions and, has a quorum of two members.  Decisions are made on a majority of votes with one vote per member and the Chair having a casting vote in the event of an equality of votes.

The Committee has the following key responsibilities in connection with remuneration:

a. Annual review of the Group Remuneration Policy (Policy);

b. Coordination of the annual board performance appraisal process;

c. Setting the remuneration of directors and senior management;

d. Review and approval of executive and employee bonus schemes;

e. Review and approval of pension provision for executives and staff;

f. Review and approval of termination provisions in executive employment contracts.

The Senior Officer outside Australia approves the Policy on behalf of the Australia branch. At every meeting of the Board, the Committee will provide an update on recent activity, including details on any group policies that have been approved, with copies of the policies provided in the supporting documents pack for the Board. If there are any substantial changes to the Remuneration Policy, it will be presented to the Board for approval. Both the Senior Officer outside Australia and the Group Chief Risk Officer attend the Board meetings. The compliance team undertake an annual review of the Policy. The Remuneration framework is set out in the NorthStandard Group Remuneration Policy.

The Committee reviews and makes recommendations to the Board on the setting of remuneration of Non-executive Directors with the Board having final approval.

– 1.2 How is discretion exercised?

The Committee has the power to apply discretion to override formulaic outcomes and to recover and/or withhold awards under appropriate specified circumstances.  These circumstances include misconduct leading to significant adverse outcomes; a significant failure of financial or non-financial risk management; a significant breach of fitness and propriety, accountability or compliance obligations; a significant error or misstatement of variable remuneration; and/or significant adverse outcomes for customers.

2. Design and Structure of Remuneration Framework

– 2.1 How does it align to the business plan, strategic objectives, and risk management framework?

The Framework is designed to meet the following goals:

• ensure that remuneration policies and practices support the strategy of the Group and the Australia branch; 

• promote long-term sustainable success; 

• ensure that remuneration awards do not threaten the ability of the Group or any individual Group undertaking to maintain an adequate capital base; 

• ensure that remuneration arrangements do not encourage risk taking that is excessive in view of the Group’s risk management strategies; 

• ensure that remuneration arrangements do not threaten the ability of a Group company to meet applicable regulatory requirements and standards; and 

• establish, develop, and implement a consistent remuneration policy for the whole Group that is in line with the Group’s risk management strategies;

– 2.2 How does it promote the effective management of both financial and non-financial risks, sustainable performance, long-term soundness and the prevention and mitigation of conduct risk? 

The Framework states that all Group undertakings must ensure that the remuneration awarded to its directors and relevant staff:

• provides fair and competitive compensation for the services provided;

• is aligned with market practice and is sufficient to attract, develop and retain candidates with the required level of seniority, knowledge, skills, and experience;

• motivates performance in the best interests of the Group, the Australia branch and its stakeholders;

• promotes the delivery of long term, sustainable value to the Group, the Australia branch and its stakeholders;

• is aligned to the Group’s vision and values, and is clearly linked to the successful delivery of the Group’s strategy and that of the Australia branch;

• promotes fair and ethical business conduct;

• does not threaten the financial position of the Group or any individual Group undertaking;

• does not threaten the ability of the Group or any individual Group undertaking to maintain an adequate capital base;

• does not encourage or reward risk taking that is excessive in view of the Group’s risk management strategies; and

• serves to promote compliance with all applicable laws, regulations, and prudential standards.

 3. Remuneration Policy Details

– 3.1 Variable Remuneration and Performance 

The Group Chief People Officer is responsible for ensuring a robust performance review process is in place for all Group staff that is aligned with the Group’s strategy, risk appetite and risk management framework.  All roles within the business are subject to participating in the agreed performance review process including the specified roles listed below.  The Bonus Plan includes a direct link to the achievement of NorthStandard’s Key Performance Indicators (KPIs) and individual Objectives and Key Results (OKRs) and is calculated on company performance and personal performance using these metrics. The proportion of the bonus allocation to the company and personal elements varies depending on an individual’s role. Performance rating criteria are set for KPIs and OKRs which determine the level of bonus awards for staff.

– 3.2 Specified Roles

The Group Nominations and Remuneration Committee is responsible for reviewing and determining the remuneration packages of relevant senior staff on an annual basis, including all members of the Group Executive Leadership Team, which includes Group Chief Finance Officer (also the Senior Officer outside Australia), The Group Chief Risk Officer and the Group Chief Operating Officer.

– 3.3 Consequence Management

The Policy states that when awarding variable remuneration such as bonus payments, consideration should be given to the circumstances under which it would be appropriate to adjust or clawback payment of such remuneration, and where such terms are considered appropriate, they should be applied to the award to enable adjustment/clawback in all relevant circumstances.

As stated above, the circumstances under which it may be appropriate to adjust or clawback an award of variable remuneration include, but are not limited to, the following: misconduct leading to significant adverse outcomes; a significant failure of financial or non-financial risk management; a significant breach of fitness and propriety, accountability or compliance obligations; a significant error or misstatement of variable remuneration; and/or significant adverse outcomes for customers.

– 3.4 Types of Variable Remuneration

The only type of variable remuneration routinely provided is annual cash bonus awards.  The Policy confirms that the following types of remuneration award must not be provided by any Group undertaking without the express prior approval of the NorthStandard Board of Directors:

• Bonus schemes (other than those currently in operation);

• Profit sharing arrangements;

• Share option schemes;

• Guaranteed performance payments;

• Defined benefit pension schemes (other than the closed schemes already in existence);

• An award of variable remuneration in circumstances where the individual’s total remuneration exceeds £500,000 and variable remuneration exceeds 33% of total remuneration.

– 3.5 Deferrals and Adjustments to Manage Long Term Risk

The current Remuneration Framework includes provisions for deferrals of variable remuneration in line with the Financial Accountability Regime requirements for Approved Persons. Long term risk is addressed under the ‘Consequence Management’ section.  As the Australia branch is a non-SFI, it is not subject to deferral disclosure requirements.