The Financial Conduct Authority has fined Towergate Underwriting Group Limited £2.63m for failings in relation to its protection of client and insurer money.
Towergate, an insurance intermediary that holds both client and insurer money, accumulated a shortfall of £12.6m in those bank accounts which, due to systems and controls weaknesses, went undetected for a number of years.
The FCA has also fined former Towergate client money officer and director Timothy Philip £60,000 and banned him from having direct responsibility for client and insurer money.
Mark Steward, director of enforcement and market oversight at the FCA, said: “We have issued repeated warnings to the industry on the importance of complying with client money rules, which are designed to ensure that client money is adequately protected in the event of a firm failing.
“There can be no excuses given these warnings and the stakes involved. In addition, the firm’s failings placed insurer money at risk of loss.
“Senior management is ultimately responsible for ensuring that firms are following our rules and it is very clear that Mr Philip failed in that regard, falling well below the standards we require.”