Trouble at the FCA itself leads off our latest roundup of activity at the UK regulator. The Financial Times reported that chair Ashley Alder has been accused of breaching an internal whistleblower’s confidentiality.
Alder is said to have forwarded correspondence without redacting the whistleblower’s name, address and concerns. The FCA’s whistleblowing policy clearly states: “Your identity will not be revealed without your consent.”
The individual concerned had been sacked from the FCA in in 2021 for alleged misconduct and is currently appealing against the outcome of an employment tribunal case against the authority. The concerns the person aired relate to hiring practices at the regulator, and have prompted an internal review.
The issues raised have also led to a second internal review, this one examining how allegations of misconduct should be investigated internally.
Georgina Halford-Hall, the chief executive of WhistleblowersUK, has called for Alder to “fall on his sword”. The FCA has declined to comment beyond issuing a statement calling the case “execptional”.
As the FT piece points out, this is not the first critiocism the FCA has received over how it handles whistleblowers. Last year the Information Commissioner’s Office ruled the FCA had breached data protection regulations by allegedly intercepting and diverting staff correspondence.
Enforcement
The Upper Tribunal has ruled in favor of the FCA’s decision to refuse to allow Thomas Llewellyn Kalaris to perform senior manager functions. The FCA’s decision relates to two enforcement interviews conducted with Kalaris about his time at Barclays in which he was found to have been dishonest
Rules and consultations
Insurance has been something of a focus, with the announcement of “a market study into how pure protection insurance products are sold” coming shortly after the publication of a thematic review into the sector (see below).
Pure protections policies are designed to help with personal finances after a policyholder dies or becomes unable to meet their financial commitments. The products are maily sold through intermediaries and the FCA is concerned that “the design of commission arrangements may not allow firms to deliver good outcomes to policyholders.” It goes on to say it is also concerned that “some products may be providing poor value, for example if the total premiums paid over a lifetime far exceed the maximum conceivable payout.”
The study will begin later this year or early next, and will “explore consumers’ engagement with and understanding of the products they are buying, the competitive constraints on insurers and intermediaries, and potential conflicts of interest in the structure of commission.”
Four specific products will be focused on; term assurance, critical illness cover, income protection insurance and whole of life insurance including policies for over 50s that offer guaranteed acceptance.
Publications
The regulator has published a thematic review of general insurance and pure protection product governance – and it has concluded firms need to do more to demonstrate customers are getting fair value.
“Insurers and brokers have improved governance and oversight of how products are designed, managed, reviewed, and distributed, but many still cannot show how they are providing fair value to customers or that they were receiving good outcomes,” it said.
Matt Brewis, director of insurance at the FCA, said: “’All insurance firms should take note of our findings and make improvements where appropriate. We’ll continue to take action where we see poor value so consumers can have confidence when buying insurance products.”
