Daily briefing: Monday

Let’s face it; the FSA was never going to go out on a whimper. Today’s news that the fines the regulator has collected from financial services firms in the last year have trebled in cost is hardly a surprise given its ‘tough guy’ approach to enforcement that it has adopted in the last couple of years.

The figures released by law firm RPC for the financial year ending 31 March 2011 show that fines rose staggeringly from £33.1m to £96.7m. The bulk of these fines landed in the laps of large asset management firms like J.P. Morgan, which landed a hefty £33m fine in June because it did not protect client money properly.

Fines for insurance brokers make up the total figure, but they have escaped any big hits. In the last year, the broker market has seen its fair share of individual fines and bans and knows only too well about the tough hand of the FSA. Aons 5.25m fine in January 2009 has yet to be eclipsed. Only HSBC Insurance Brokers, with a £700,000 fine in June of the same year, has come close. Some small insurance brokers have been struck off rather than being fined, RPC told me.

So, if this is the FSA’s swansong, what does the future hold? It is expected that the £96.7m figure could treble again in the next year. This is because last year the FSA introduced a new fines policy that means they will be calculated based on the turnover of the firm during the period leading up to the fine. This will apply to all conduct after March 2010.

By the end of 2012, the FSA will be no more. The FSA will be replaced by two bodies: the Financial Conduct Authority and the Prudential Regulation Authority. Both will have the power to issue fines, but the policy under which they will do so is still unclear. Parliament has yet to have its say and the relevant legislation has not been passed. But the desire from the government to make the new regulatory system work, and the appointment of top enforcer Margaret Cole as temporary head, means it is highly unlikely that financial services companies will be spared any relief.

What exactly is going on with Zurich Ireland?

Former RSA SME director Ken Norgrove was today confirmed as the new chief executive of Zurich Ireland. Norgrove’s move is interesting for the following reasons: he left RSA last summer to return home to Ireland with rival insurer Travelers as vice-president. But, after just a handful of months, he was off again. He has been linked with the top job at Zurich since December, and today that rumour came true. Was it just the case that a better offer came along much more quickly than expected? Or is there more going on at Zurich Ireland?

The insurer is reportedly one of two favourites to buy Quinn Insurance, alongside Anglo Irish Bank. The sale of Quinn has been dragging on for some time, but a decision is now expected around the end of the month. The timing may be accidental, but senior market sources have suggested that Norgrove’s arrival and the insurer’s move for Quinn is more than just coincidence. Watch this space.