| Link(s): Various industry publications |
Context
- The FCA’s response to a Freedom of Information (FOI) request by Sicsic Advisory, about reported Conduct Rules breaches by solo regulated insurance intermediaries last year, has been receiving wide attention in the industry because of what is seen as the low number of reported breaches among the 6,000 firms in this category.
- The low reporting levels could indicate that some regulated firms may not yet have fully embedded the Rules or do not have mechanisms in place to identify and report breaches. It is also possible that some firms may be reluctant to report Conduct Rule breaches, especially by Senior Managers, in case this may suggest the firm is not being appropriately managed.
Key points to note
- Only 15 Conduct Rule breaches were reported by insurance brokers and intermediaries between 9th December 2019 and 31st August 2020 out of 6,000 firms in this category.
- 10 breaches were reported about Certified staff and Directors who did not hold an SMF.
- The majority of those breaches were in relation to an individual’s integrity, with due skill, care and diligence being the second most reported rule breached.
- Five breaches were reported against individuals holding SMFs.
- So far there have been no appeals made on the breaches reported.
Next actions
Firms need to ensure that they have in place appropriate systems to identify and report Conduct Rule breaches by Senior Managers, Certified staff and any other individuals subject to the Conduct Rules.