RegulationNov 5 2014

FCA fines insurance execs £930k over aggressive sales

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Three former senior executives of Swinton have been fined a total of £928,000 by the regulator over high-pressure sales tactics which have previously led to a fine to £8.2m for the general insurance firm.

A culture was allowed to develop within Swinton that pushed for high sales, a final notice published by the regulator says.

Peter Halpin, who was chief executive, was fined £412,700 in addition to a ban from acting as a chief executive of an FCA authorised firm because of a lack of competence.

The FCA found that Mr Halpin failed to ensure that Swinton’s management information was adequate for the firm to identify compliance issues with the sales of the monthly add-ons and to ensure its customers were being treated fairly.

Anthony Clare has been fined £208,600 and is now banned from holding a position of significant influence in an FCA authorised firm because of a lack of competence.

In addition to his role as finance director, Mr Clare had oversight for the firm’s compliance department and a particular responsibility for ensuring that Swinton treated its customers fairly.

Nicholas Bowyer was fined £306,700 and banned from performing any significant influence function at an FCA authorised firm, again because of a lack of competence.

As marketing director, Mr Bowyer played a central role in the development and launch of the monthly add-on policies and was responsible for their design, development and marketing.

All three former directors settled at an early stage of the FCA’s investigation and therefore qualified for a 30 per cent discount on their fines.

The FCA’s action follows previous enforcement action taken against Swinton.

In 2013 Swinton was fined £7.4m after it adopted an aggressive sales strategy that resulted in mis-sales of monthly add-on insurance policies, while in 2009 the firm was fined £770,000 for failures in its sales of payment protection insurance.

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.”