FCA Dear CEO letter – Non-financial misconduct in insurance firms
FCA Dear CEO letter – Non-financial misconduct in wholesale general insurance firms
- This FCA Dear CEO letter is titled “Non-financial misconduct in wholesale general insurance firms” and is dated for 6 January 2020
- This is addressed to the Chief Executives of general insurance firms regulated by the FCA
- Following recent, publicised incidents of non-financial misconduct in the wholesale general insurance sector, the FCA is writing to set out its clear expectation that CEOs should be proactive in tackling such issues.
- The FCA expects the CEOs to identify what drives this behaviour and, where appropriate, modify those drivers to shape proper conduct.
The Dear CEO letter lists the FCA’s expectations surrounding this topic. The FCA expects firms and their senior managers to embed healthy culture by identifying and modifying the key drivers of their culture.
The four headings given are these:
- Approach to rewarding and managing people
- Governance, systems and controls
Timeline with relevant dates to be logged on regulatory calendar
- Letter published on 5 November 2019
The FCA expects all firms to review this letter and to share it with each firm’s senior executive committee and Board (or equivalent)
If the firms identify gaps or shortcomings between the FCA’s expectations and the firm’s current arrangements, the FCA expects the firm’s prompt action to address them.
The FCA notes that it will continue to work closely with the Prudential Regulation Authority (PRA) to assess instances where inappropriate culture and behaviour within firms may impact compliance with regulatory expectations, standards and the FCA’s statutory objectives.
The FCA reminds firms that it will carry out further supervisory work to assess the extent to which firms are meeting the FCA’s expectations.Click here to contact our experts