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FCA issues warning notices against two insurance brokers

The FCA has published early warning notices against two insurance brokers today for mishandling client money.

In a statement on their website, the regulator says both individuals, who have not been named, held significant influence functions at insurance mediation firms.

They were both handed warning notices on 6 March. Early warning notices are not the final decision of the FCA and those affected can appeal to the Regulatory Decisions Committee before action is taken.

The FCA says the first individual failed to act with due skill, care and diligence in relation to the handling of client money at the firm.

Between 1 April 2011 and 30 June 2012 the person is accused of creating and using inaccurate client money calculations.

This caused the firm to break rules on handling client money. Money paid to the firm by clients to buy insurance was used to fund its own business costs.

The person also failed ensure money was only transferred from clients to the firm when commission was earned.

The individual failed to understand the regulatory requirements of a person with significant influence.

For the second person, the FCA says they failed to take adequate steps to remain informed about the business and financial affairs of the firm between 1 April 2011 and 30 June 2012.

They relied solely on general verbal assurances as to the state of the business and failed to probe or challenge. The FCA says the person had no reasonable basis to rely on information given to them.

The second person is also accused of paying insurance premiums of another entity into a client premium bank account of the firm. He is accused of taking personal payments from the account. 


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