However, he was not the first senior manager of a mortgage firm to be sanctioned by the regulator for failings in this area.
Steven Leslie Davis, chief executive of, and the director responsible for, the accounts and finance functions at Essential Mortgages Limited (EML) was issued with a Statement of Misconduct in July. He failed to ensure there were adequate systems and resources in place for processing, accounting for and monitoring customers’ applications in respect of payments for accident sickness and unemployment (ASU) insurance policies. At least 350 customers’ ASU policies (worth £500,000) were not placed on risk as EML failed to pass on insurance premiums as a result of its inadequate systems and resources.
The only reason a fine was not issued was because the firm was in liquidation and any fine would have an adverse impact on creditors. We have been aware for some time that the regulator was keeping a close eye on this sector, and senior managers of authorised firms should be under no illusion that the FSA will act where firms fail to act appropriately when carrying out their regulatory responsibilities. Those firms that do not have proper systems in place should consider outsourcing their general insurance functions to experts.
Geoff Hall
Director
Berkeley Alexander Insurance Services
