The United Kingdom’s regulatory body for the finance sector recently released a warning against commercial insurance bosses in light of the string of bad behaviors associated with these leaders. Reuters reported that the Financial Conduct Authority (FCA) told these companies to eliminate such actions and to enhance diversity.
According to a letter from Jonathan Davidson, FCA’s Executive Director of Supervision, Retail and Authorizations, bosses who fail to take “reasonable steps to address non-financial misconduct” risk losing their jobs. Davidson added that the criteria for becoming senior managers include several factors, which include integrity and reputation.
Insurance firms are required to share the letter posted on the FCA website to senior executives and boards. Moreover, concerned individuals are urged to take immediate action.
The letter also recognizes that “non-financial misconduct and an unhealthy culture is a key root cause of harm.” Such factors can harm customers, market players, employees and the market as a whole.
Meanwhile, Davidson’s letter remarked that “although work has been undertaken in the market to tackle the issue of non-financial misconduct, it continues to be prevalent and will be a key focus for our supervision of firms and of senior managers.”
The regulatory body did not identify specific companies. However, this move came after Lloyd’s of London acknowledged accusations of sexual harassment and daytime drinking in 2018. The institution has announced a strategy to elevate standards.
Moreover, AXA UK said that it is conducting management training for its brokers. The program discusses preventing and handling bullying and sexual harassment cases.
In ensuring the impact of the new announcement, FCA said that it will be working with the Prudential Regulation Authority. This collaboration is to evaluate situations in which inappropriate behavior and culture can affect compliance with regulations, standards, and objectives.