One Call fine “a shot across the bow”

The fine totalling more than £1m and £4.6m renewal hit on One Call has been described as a shot across the bow from the Financial Conduct Authority (FCA).

The organisation and its CEO John Radford were fined by the watchdog and restricted from renewals for 121 days after mistakes with the management of client money were revealed.

Andy Jenkins, operations director, Russell Scanlan Insurance Brokers, commented that the penalties were “a shot across the bow” from the regulator warning brokers to play by the rules.

He also warned that the widely reported fines could affect the reputation of the market.

They will “tarnish the reputation” of the insurance sector, he noted.

“The regulator has done its job but it still does not leave us in a good light,” he added.

Dangerous
For Paul Muir of 1 Answer Network the rules are clear and there is no room for error.

He stated: “When I explain it I always say you do not touch client money.

“It is not our money. It is very dangerous to touch it.”

Jenkins agreed that it is fairly simple to comply.

He noted: “It is not that hard [to follow client money rules] but you have to be robust and keep up with Tobas etc…”

“But the fundamentals are quite simple.”

Jenkins also pointed out that brokers are under obligation to have client money audited so if mistakes occur they can be rectified if an audit uncovers them.

“You segregate the money,” he explained.

The rules have been in place since 2005 and Jenkins advised they have been changed only a little since then.

Understanding
Broker Network assists its members with client money compliance. Its CEO Andy Fairchild disagreed with the idea that the regulations are simple and described the rules as “complex”.

However, he highlighted the importance of brokers understanding them.

Fairchild stated: “As well as being equipped with a thorough understanding of the client money handling rules, it is important for brokers to have a strong awareness of risk transfer clauses within insurer terms of business agreements (Tobas) that can impact compliance.

“Consistent governance and oversight is essential to maintaining quality standards.”

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