FCA responds to a Freedom of Information request regarding Enforcement Actions

On 16th May 2022, the FCA provided their response to a Freedom of Information request which made enquires as to the number of Enforcement Actions the FCA is undertaking into those firms who have general insurance broking permissions.

In light of the wording of the questions asked, some of the answers given may not be about general insurance wrongdoings, but instead could be wrongdoings by IFAs, mortgage brokers, and consumer credit firms that also have general insurance broking permissions.

Whilst the majority of the information sought related specifically to those firms who hold permissions to trade as a general insurance broker, there were a couple of questions asked about all firms who fall under the FCA’s remit.

In their response, the FCA confirmed:

  • There are 33 open investigations of firms with permission to trade as a general insurance broker. 8 firms have an individual as the subject and 25 have the firm itself as the subject.
  • There are 4 open investigations into individuals who held a Senior Manager Function (SMF) at the time of the response, at firms with permission to trade as a general insurance broker. Looking at the breakdown (table below) these individuals hold more than one SMF, so clearly all four hold SMF3 and one other SMF.

  • There are 384 open investigations across all firms authorised by the FCA. 248 are investigations into individuals and 136 into firms.
  • 6% of current open investigations relate to firms with insurance distribution permissions with 2.8% of the open investigations relating to individuals at such firms, and 18.4% of the open investigations relate to the firms as a whole.
  • Since 9th December 2019, there have been 14 investigations launched into firms with permissions to trade as a general insurance broker. 3 are investigations into individuals and 11 into firms. This means that at least 19 of the current 33 open investigations were started before the 9th of December 2019 – so are more than two years old.
  • Since 9th December 2019, there have been 2 investigations launched into individuals who held an SMF at the time of the investigation. Both individuals held multiple SMFs (SMF3, SMF16, and SMF27).
  • Since 9th December 2019, there have been 192 investigations opened into firms authorised by the FCA. 124 investigations are into individuals and 68 into firms.

The above figures show how long enforcement investigations can take with at least 14 investigations into firms and 5 investigations into individuals (including two into SMFs) being undertaken for more than two years.

Whilst the above figures are a small proportion of the overall number of investigations it is important that firms do not become complacent when it comes to complying with regulation. It may take a while, but the regulator will catch up.

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