FCA hits former Swinton bosses with large fines and bans
In early November, the Financial Conduct Authority (FCA) imposed fines and bans on three former senior executives of Manchester-based insurer Swinton Group.
Former chief executive Peter Halpin was banned from holding the same role in financial services in the future, and was fined £412,700. Former finance director Anthony Clare and former marketing director Nicholas Bowyer were both banned from holding significant influence functions, and were fined £208,600 and £306,700 respectively.
Mr Halpin and his colleagues were said to have demonstrated ‘a lack of competence’. In 2013, Swinton was fined £7.4 million for mis-selling of add-on insurance policies. Failings identified at that time included: not telling customers policies were optional, failing to provide sufficient information about the policies, not carrying out sufficient compliance monitoring and adopting an ‘aggressive sales strategy’.
The FCA has now determined that Mr Halpin, as chairman of the firm’s Compliance Board, was personally responsible for failing to ensure that sufficient management information was obtained regarding these sales, information which could have allowed the firm to identify compliance issues more readily.
In addition to his finance duties, Mr Clare held overall responsibility for compliance oversight. He is also said to have failed to identify issues with compliance monitoring and management information regarding the add-on policies.
Mr Bowyer did not hold a compliance role, but his marketing role gave him overall responsibility for the design and promotion of the mis-sold add-on products. The FCA says that he failed to appreciate that as a director, he had a responsibility to ensure customers were treated fairly at all times.
Mr Clare and Mr Bowyer were also said to have encouraged a ‘sales-focused culture’ at Swinton. Back in 2009, the insurer was fined £770,000 for mis-selling of payment protection insurance.
The action serves as a reminder that the FCA can take action against individuals who hold Approved Person roles, as well as against the firms themselves.
Tracey McDermott, director of enforcement and financial crime at the FCA, said: “A culture was allowed to develop within Swinton that pushed for high sales and increased profit without regard to the impact on the firm’s customers. We expect firms to put customers at the heart of their business. These three directors should have recognised the risk to customers and redressed the balance so that the drive to maximise profits did not jeopardise the fair treatment of customers.”
Mr Halpin said of the FCA action:
“I sincerely regret any possible unintended detriment suffered by customers. I acted in good faith at all times and it is of some significant comfort that the Regulator did not impugn my integrity, nor find that my conduct was improperly motivated by incentive arrangements.”
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.