The individual complained to the Complaints Commissioner after being told by the regulator that it could not provide information on a firm’s professional indemnity insurer, which the complainant was seeking.
The complainant had been told to issue a freedom of information request to the FCA only to then be told the regulator does not hold the information.
They were then told the FCA complaints team would contact them with a summary of understanding of their complaint but this did not happen.
The FCA then issued a decision letter but the complainant felt this did not address the heart of their complaint.
The claimant said they needed the insurance broker's PI information as part of a litigation case against the firm.
The FCA told the claimant the firm referred to had been authorised in 2005 and at that time the Financial Services Authority did not require firms to disclose the name of their insurer, which is why the FCA did not hold insurance details.
The complainant said the FCA was operating a “two-tier system” with different levels of protection for the consumer as firms prior to 2005 were permitted to operate without providing PII information, but firms after the new regulations are required to provide this information.
In July the complainant brought their case to the Complaints Commissioner after the regulator refused to investigate it.
They filed their complaint on the grounds that they were unhappy with the FCA’s response and said in order to resolve the complaint, they would like the PII information for Firm X and the company’s name.
The commissioner did not uphold the complaint but recommended the regulator revisited the wording in its update letters to complainants.
Amerdeep Somal said the complaint had been complicated by the FCA supervision hub’s letters stating that firms have to have PII in place but do not have to declare the name of the insurers, while its decision letter implied the FCA asks for the name of the PII insurer of more recently authorised firms.
Somal said: “I agree that this could seem to create a two tier system of those authorised under the old scheme and those authorised by the FCA and two tiers of information that the FCA holds.
“I do feel that the FCA have now provided a reasonable explanation to me about the information it obtains in relation to PI Insurance held by firms and that it does not require the name of each insurer and that it does not verify the PI Insurance details for each firm.
“I do not consider that the FCA was negligent in not having the PI insurance details for Firm X and I believe that it is reasonable that the FCA does not verify PI Insurance details for every firm."
Somal added: “Whilst I am pleased that the FCA has acknowledged its service failings in addressing your complaint, I do still feel that the wording used in its four weekly update emails to you created an incorrect impression about how your complaint would be progressed and that it should apologise to you for any confusion that this caused to you.
“I also feel that moving forwards the FCA should consider reviewing the wording of its update emails to better communicate that its next correspondence will confirm whether the complaint can be investigated under the complaints scheme and if it can that it will provide the complainant with its understanding of their complaint at that time.”
In the FCA's response published yesterday (December 7), it said it accepted the wording used in some of its correspondence with the complainant would have been confusing and created an incorrect impression.
“We have written to the complainant to apologise for this,” it said. “In relation to the recommendation to review the wording of our update letters, we have not accepted this on the basis that the relevant correspondence has already been reviewed and updated in response to a recommendation made in another recent complaint.”
“In relation to the suggestion that we may wish to review the information we hold about PII cover for firms first authorised by the Financial Services Authority in 2005, we do not propose to carry out a review as suggested.
“All authorised firms submit the same PII information to us under their regulatory returns, irrespective of the date when they were first authorised.”
sonia.rach@ft.com
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