U.K. Insurers Are Failing to Supervise Salespeople, FCA Saysby
FCA will write to chief executives demamding better oversight
More than half of companies were not clearly managing risks
The Financial Conduct Authority will write to chief executives of U.K. insurers after it found "widespread" evidence that companies are failing to supervise external salespeople.
More than half of the companies in a 15-firm sample were unable to demonstrate they could manage the risks arising from the salespeople, who are also known as appointed representatives, the regulator said in an e-mailed statement. The FCA found examples of potential mis-selling by appointed representatives at a third of the companies included in the review.
Mis-selling has hurt the British financial industry since the financial crisis. The U.K.’s five major banks set aside 31 billion pounds from 2011 through 2015 to cover costs related to payment-protection insurance, KPMG said in April.
"We found widespread examples of poor practices across the sector," said Jonathan Davidson, director of supervision at the FCA. "In many cases firms were simply failing to understand and manage the risks arising from their appointed representatives’ activities."