The Financial Conduct Authority’s caution follows on the heels of major admissions at Lloyd’s.
The Financial Conduct Authority has issued a stern warning to the UK insurance industry to clean up its act. It warned insurer bosses that they had better eliminate their unacceptable behaviors and improve diversity among their numbers.
The FCA’s warning comes with a threat to the jobs of the commercial insurance company bosses.
This warning to the UK insurance industry arrives shortly after the 2019 admission from Lloyd’s of London of cases of sexual harassment and daytime drinking among its own employees and across the market as a whole, in which there are about 50,000 people employed. Lloyd’s has formed a plan for improving its standards.
“A senior manager’s failure to take reasonable steps to address non-financial misconduct could lead us to determine that they are not fit and proper,” said FCA Executive Director of Supervision, Retail and Authorizations, Jonathan Davidson in a letter he released at the start of the week.
The FCA shared the letter with chief executives across the UK insurance industry and on its own website.
According to the letter, there are many factors taken into account for senior manager approval. These include reputation and integrity.
“Although work has been undertaken in the market to tackle the issue of non-financial misconduct, it continues to be prevalent and will be a key focus for our supervision of firms and of senior managers,” explained Davidson.
Davidson also urged insurance companies to share the FCA’s letter among all its senior execs and board members. Furthermore, they are instructed to “act promptly” to manage shortfalls and develop strategies for overcoming them in the future.
At the time this article was written, the FCA had not revealed the names of the insurance companies that were in direct receipt of the letter. That said, all firms throughout the UK insurance industry are being encouraged to improve their employee conduct following the Lloyd’s case. This week, Axa UK said that it had begun broker management training, which included recommendations for preventing and addressing sexual harassment and bullying among its topics.