FCA sets its sights on offshore insurance failures
Andrew Bailey the chief executive of the Financial Conduct Authority has expressed concerns about the failures of offshore insurance companies, whose products have been sold in the UK by financial advisers.
In his speech at the FCA’s annual conference, which has been taking place this week, Bailey commented on the failures of off-shore insurers doing business with brokers in the UK and beyond.
Failed businesses such as Liechtenstein-based Gable Insurance and Gibraltar-based Enterprise Insurance, have, as reported, had a knock-on effect with many advisers in the UK and in other international jurisdictions having sold their products.
“We are in close contact with the regulator in Gibraltar and we’re following the impact of that [Enterprise] very closely,” the FCA CEO confirmed.
“We’re in close contact with the regulator in Liechtenstein as well,” he continued. “We will be looking at the question of how these products are marketed.”
In his speech, given yesterday at the three day conference which has been held at the Queen Elizabeth International Conference Centre in London, Bailey also said that firms making plans before knowing the outcome of Brexit negotiations may find themselves in a “difficult situation”.
Because the majority of firms have already put their contingency plans for Brexit in place, they might experience difficulties when the terms of the Brexit deal are agreed, Bailey said.
“I do think it [an agreement on a transition period] is important because otherwise firms find themselves in the position where they have to make a plan without knowing what the outcome of the negotiations is,” Bailey stated.
“That seems to me to be a difficult situation to be in.”
He added that “there is every reason to have open markets and free trade” after Brexit.
Another issue addressed at the conference was the Financial Services Compensation Scheme and the levy financial firms have to pay to the scheme every year.
As reported, the FSCS confirmed in April that brokers will be paying a levy of £18m for the year 2017/18.
“The bill is very large and by definition it falls on people who haven’t committed the crime,” admitted FCA chairman John Griffith-Jones, speaking at the conference.
He continued adding that everyone was unhappy with the current situation and that addressing it should be a “regulatory priority”.