On September 10 2015, the Financial Conduct Authority (FCA) banned Ralph Whittington, a shareholder of insurance broker Savesure Limited, from holding authorised roles in financial services, after he was found to have mis-appropriated insurance premiums for his own use. He has also been fined £42,111, to be paid in three equal instalments in September 2016, September 2017 and September 2018.
Premiums that Savesure’s customers thought they were paying into their policies were instead used by Mr Whittington to allow him to get back money he had invested in the firm, as well as to pay the firm’s regular expenses. He carried out the mis-appropriation by transferring more funds from the firm’s premium account to its main bank account than his firm was entitled to receive in commission. A total of £50,899 was mis-appropriated in this way, and the FCA says in its Final Notice that Mr Whittington was solely responsible for these actions, and that he was fully aware that what he was doing was wrong.
Savesure is now in liquidation.
Unsurprisingly, the FCA has concluded that Mr Whittington is not a ‘fit and proper’ person to work in financial services. Demonstrating fitness and propriety is a key part of the process of applying for authorisation, and approved persons are expected to continue to demonstrate the highest standards of conduct once authorised.
Individual authorisation is required for those carrying out ‘controlled functions’. Holders of controlled functions are known as ‘approved persons’ once the FCA has ratified their application.
The individuals who will require this individual authorisation include:
• Chief executive
• Apportionment and oversight officer
• Compliance officer
• Money laundering reporting officer
• Those carrying out systems and controls functions
• Those carrying out significant management functions
• Those carrying out customer functions, e.g. financial advisers
The FCA’s fit and proper test includes a series of assessments regarding: honesty, integrity and reputation; competence and capability; and financial soundness.
Examples of information the FCA may use to assess individuals against these criteria include:
• Their conduct in any other controlled functions they may have held
• Their disciplinary record during their career to date, including complaints upheld against them, warnings, dismissals, disqualifications from acting as a director etc.
• A Curriculum Vitae
• A description of the role the individual will carry out
• The minutes of any meetings of the firm’s board in which an intention to appoint the individual to a controlled function was agreed
• Details of the recruitment process followed for the individual, including notes from their interview
• A ‘skills gap analysis’, evidencing whether the individual has the necessary skills and experience to carry out the controlled function
• A Learning and Development Plan, outlining the personal development that the individual intends to undertake if approved to perform the role
• References from past employers and others who have known the individual in a professional capacity
• Credit checks – is there evidence of previous credit defaults, bankruptcies or insolvency events, whether they concern the individual themselves or any firms they have previously been involved in
• Any previous criminal convictions
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.