Senior management responsibility in insurance

The Financial Services Authority is driving home the message of senior management responsibility in insurance companies and earlier this summer it went beyond punishing firms when it took action against an individual senior manager of a mortgage and insurance broker for the first time. In this article Ian Mason, a partner in the Financial Services Regulatory team of Barlow Lyde & Gilbert, looks at the context of FSA enforcement action in the insurance industry and explains how firms can avoid a costly penalty.

The Financial Services Authority (FSA) has consistently stated it regards a regulated firm’s senior management as being primarily responsible for ensuring that a firm complies with FSA rules. Recent FSA pronouncements (as well as some recent enforcement cases) indicate that the FSA is increasing its focus in this area.