Context
The Bank of England and PRA have announced that the insurer HDI Global has been fined £4.165m in connection with the submission of incorrect FSCS Liabilities and FSCS Fee Tariff data to the PRA. This occurred on multiple occasions between August 2021 and August 2024 and included errors in data provided to the PRA in purported remediation of previously incorrect submissions. HDI Global SE is a branch of a global insurance company headquartered in Hanover, Germany. In the UK, the Firm is regulated by the PRA and FCA.
Key points to note and next actions
- Misreporting of FSCS Liabilities may hinder the PRA’s ability to identify material risks and may also result in a firm underpaying any applicable levy to the FSCS.
- The errors in HDI Global SE’s submissions arose and persisted because of its failure to apply due skill, care and diligence to ensure that the data was calculated correctly.
- Prior to the summer of 2023, HDI Global SE failed to check the PRA Rulebook or guidance as to what liabilities are covered by the FSCS and the methodology for the calculation of the components of the FSCS Fee Tariff Data.
- HDI Global SE also had no effective written processes that would ensure that such calculations were carried out to any reliable standard, and there was a lack of clear accountability, internal oversight and challenge, reflecting a failure in organising and controlling its affairs responsibly and effectively. These failures resulted in inaccurate data being provided to the PRA.
- HDI Global SE has now implemented a number of remediation initiatives and has submitted corrected historical data and paid additional levies required to date by the FSCS to remedy the errors in respect of FSCS Fee Tariff data.