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FCA fines insurance broker £4m for sales bias toward ex-parent firm

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  • 06/12/2017
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FCA fines insurance broker £4m for sales bias toward ex-parent firm
Industry watchdog the Financial Conduct Authority (FCA) has fined Bluefin insurance just over £4m for its failure to point out its advice bias toward its owner, insurer Axa, and inadequate systems and controls.

From March 2011 to December 2014, Bluefin, which was owned by Axa UK before the Marsh buyout at the end of 2016, promoted its independence to customers, but “failed to implement adequate systems and controls to manage the conflict that arose from Bluefin’s ownership.”

“Bluefin’s independence was compromised by its culture which promoted business strategies, including a policy which focused on increasing the business placed with its parent company, over treating customers fairly,” said the regulator.

Customers risked being misled into believing they were dealing with a broker who would conduct an unbiased search of the market.

Bluefin has more than 1,400 staff in 40 offices across the UK and specialises in a raft of corporate and commercial insurance, employee benefits and risk management.

Mark Steward, executive director enforcement and market oversight, said: “Insurance brokers must promote a culture in which they act in their customers’ best interests and provide them with the information they need to make an informed decision. This is central to the relationship between the industry and its customers.

“It is also unacceptable that firms hold themselves out as independent when they are not.”

Bluefin agreed to settle at an early stage of the investigation and received a 30% reduction in its overall fine. Without this discount the fine would have been £5,748,200.

The FCA makes no criticism of any member of the Axa Group other than Bluefin.

A spokesman for Marsh said: “We were aware of the investigation into these practices in Bluefin when we acquired the business at the end of last year. After the transaction closed we reviewed and, where appropriate, improved Bluefin’s practices and policies to align them with our own high, client-centric standards. During this time we have also worked with the FCA to ensure that this case was fully resolved.”

 

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