The regulator gave a market sensitive briefing to the Telegraph about an upcoming review of past life insurance products, sending life insurers’ shares tumbling.
It explained its remarks and the scope of the review only days later.
In an independent inquiry into the matter by law firm Clifford Chance partner Simon Davis, out today, the FCA was accused of a “seriously inadequate” response and falling “short of the standards expected of those it regulates”.
The FCA responded by saying: “The FCA board fully accept Mr Davis’ criticisms and on behalf of the FCA we apologise for the mistakes that were made and the shortcomings in systems and controls which his report has revealed.
“We are making a number of changes to our structure and operating model in order to sharpen our focus, which will also address some of the issues identified in the report.”
FCA chief executive, Martin Wheatley, director of supervision Clive Adamson, director of communications and international Zitah McMillan and director of markets David Lawton will not be receiving a bonus for 2013/14 as a result of the failing.
The 2013/14 bonus payments for all other members of executive committee have been cut by 25%, the FCA said, adding other disciplinary action has been completed as appropriate.
Davis had said in his report: “The FCA’s strategy of giving an advance briefing to The Telegraph in relation to the scope of the Life Insurance Review was well intentioned: the FCA had sought to avoid the nature and scope of the Life Insurance Review being misunderstood when it was announced for the first time in the Business Plan, to be published on Monday March 31 2014.
“The strategy and the manner in which it was pursued was, however, high risk, poorly supervised and inadequately controlled. When it went wrong, the FCA’s reaction was seriously inadequate and fell short of the standards expected of those it regulates.
“As well as errors by individuals, the report identifies a number of shortcomings in the FCA’s systems and ways of working.”
