Context
At a meeting this week of the APCC’s General Insurance Working Group, on which we are represented, an issue was raised in relation to HSBC Bank and letters that have been sent to insurance brokers in relation to their client money accounts.
Key points to note
- We understand that HSBC has written to some insurance brokers questioning the title of the client account
- As part of the communication, HSBC advised the brokers concerned that their client account was being converted to operate on a ‘current account’ type basis, meaning that the protections / provisions of no right of set-off against the account and no application of fees or charges to the account were removed. This is contrary to the requirements in CASS 5 in relation to the operation of client trust accounts.
- The firms concerned, with the assistance of their compliance consultancy, wrote to HSBC to set out what the position needs to be (effectively re-issuing to HSBC the client trust account letter requesting that certain requirements are confirmed).
- We understand that in both cases HSBC accepted that they were in the wrong and the issue was resolved.
Next actions
This information is provided for general awareness, but also in case any firms are affected by this issue. If you hold a client money account of any kind with HSBC and they write to you about the issues set out above, please contact us for assistance.