Governance references

Supporting material for The Alignment-Industrial Complex by Adrian McPhee. These scope notes retain the regulatory inventory from the book's Sources and Evidence.

The book's regulatory claims were checked through 5 September 2026.

The UK's Senior Managers Regime requires applicable firms to allocate senior management responsibility clearly. Solvency II requires risk-management and actuarial functions; Article 48 includes an actuarial opinion on overall underwriting policy. The EU Digital Operational Resilience Act assigns the management body responsibility for the ICT risk-management framework and oversight of ICT third-party arrangements. These sources support the need for institutional accountability that cannot be delegated away. Exact duties depend on the entity, role and applicable law.

In the United States, the interagency revised guidance transmitted by the Federal Reserve as SR 26-2 in April 2026 superseded SR 11-7 and emphasises materiality, aggregate risk, effective challenge and clear roles across the model lifecycle for covered banking organisations. Generative and agentic AI are outside its scope; banks' wider risk-management and governance practices should guide their controls. The NAIC's ORSA Guidance Manual and Model Act #505 ask covered insurers and groups, where adopted by a state, to assess material current and prospective risks and capital adequacy from a group perspective. These are scope analogues, not laws governing the fictional insurer.

The model-control episode in The Unit Fails Well is composite. It is consistent with the general allocation used in regulated financial services: the operating owner owns model use and first-line control, a specialist function challenges independently and the accountable senior manager must be able to inspect the current evidence. The cited PRA model-risk statement applies to firms inside its stated banking scope, not automatically to the fictional insurer. It is a design reference, not the source of a legal conclusion about the story.

Primary sources

• UK Senior Managers Regime: FCA SUP 10C
• Allocation of senior management responsibilities: FCA SYSC 26
• Solvency II: Directive 2009/138/EC, including Article 48
• EU Digital Operational Resilience Act: Regulation (EU) 2022/2554
• US Federal Reserve SR 26-2: Revised Guidance on Model Risk Management
• NAIC Own Risk and Solvency Assessment Guidance Manual
• NAIC Risk Management and ORSA Model Act 505
• PRA SS1/23: Model risk management principles for banks