What is the primary reason the regulator approves individuals for controlled functions?

The primary reason for the regulator's approval of individuals for controlled functions is to ensure that they are fit and proper. This is a crucial aspect of regulatory oversight in the insurance industry. The "fit and proper" test is designed to assess the competence, integrity, and financial standing of individuals who hold certain roles that have a significant impact on the stability and conduct of an insurance firm.

This process helps maintain public confidence in the insurance sector, ensuring that those in control possess the necessary skills and ethical standards to perform their duties effectively. By prioritizing the fit and proper criteria, the regulator upholds high professional standards that are essential for protecting policyholders and promoting sound business practices within the market.

The other options, while related to regulatory compliance or ethical conduct, do not directly address the primary reason for individual approval in controlled functions. Compliance with EU solvency requirements, Insurance Premium Tax legislation, and adherence to ethical codes are important, but they are not the central focus of the fit and proper assessment distinctively aimed at approving individuals for specific roles.