FSA orders networks to control their ARs after £21,000 fine

FSA orders networks to control their ARs after £21,000 fine




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The FSA has issued a warning to networks, telling them they must exercise control over the activities of their appointed representatives after insurance broker Aspray Limited was fined £21,000 for failing in this area. 

The regulator found that Aspray misled clients and did not maintain appropriate systems and controls for the recruitment, training and monitoring of its ARs. The insurance broker told clients that its services were free of charge, but cancellation charges could be issued and ARs could charge an insurance excess.  

 

The Blackburn-based firm also deceived the FSA, claiming that compliance visits and financial checks had been made on all of its ARs and that their files had been reviewed when in reality, none of these procedures had been carried out.

 

The head of retail enforcement at the FSA, Jonathan Phelan, commented: “It is vital that principal firms maintain effective controls over the recruitment, training and monitoring of their appointed representatives.”

 

The City watchdog acknowledged that the firm had co-operated fully with the investigation, accepting that there had been management and control failures. It has now implemented changes to its practices and procedures.

 

Since the firm agreed to settle at an early stage, it qualified for a 30% discount on its fine under the FSA’s executive settlement procedures. It could have incurred a financial penalty of £30,000.

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