FCA annual report reveals the tactics the regulator uses on misbehaving general insurance professionals
The FCA’s tactics in cracking down on misbehaving general insurance professionals has been revealed today.
One of the biggest weapons the FCA has is refusing, delaying or cancelling insurance professionals authorisations, the regulator’s enforcement annual report says.
Across the whole of the finance sector, including general insurance, 149 individuals were punished this way in 2016/2017.
This surged to 238 individuals the following year.
But perhaps even more worrying for general insurance professionals will be the FCA’s new and aggressive approach to individual fines.
Last year the FCA’s total fines against individuals was £800,000. But this has rocketed to £80.2m in 2018/2019 (see graph below).
The FCA says protecting customers is of the highest priority when it comes to enforcement, with more than 100 cases still being probed at March this year.
The regulator is particularly concerned about cyber breaches.
It highlights the case of Tesco Bank, which was fined £16.4m in October last year.
Cyber hackers breached their weak defences around debit card information, scooping £2.26m.
The FCA also highlights mis-selling insurance products, and in particular poor training and luring customers into buying insurance that they already have cover for.
Tradesman insurance under fire
A major concern for brokers will be tradesman insurance, a product widely distributed by intermediaries.
Although no enforcement actions have been taken on tradesman insurance, the FCA is probing the product.
The FCA is concerned brokers are charging extra fees on top of the commission they already earn, meaning the customer is forking out too much on the product.
In personal lines, products under investigation include travel, motor ancilaries and GAP insurance.
”The problems we found can potentially harm customers. These include prices that are too high, customers being sold unsuitable products and firms not handling claims or complaints in the way they should,” the FCA says in its associated general annual report today.
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