FCA has written to the CEOs of wholesale general insurance firms reminding them of the importance of high standards of culture and conduct throughout their business. It expects CEOs to identify what drives behaviour that has led to recent non-financial misconduct in the sector and take action to shape proper conduct.
The letter refers to the expectations the SMCR places on insurers and brokers, and the importance of firms having clear purpose which is fundamental to culture. It notes that a senior manager’s failure to take reasonable steps to address non-financial misconduct could lead to a determination that the individual is not fit and proper. It specifically highlights FCA’s expectations for a firm to have strong whistleblowing processes and appropriate incentive structures.
The letter includes links to FCA materials aimed at exploring what makes healthy, sustainable cultures and calls on firms to help it meet its aims.
It expects all firms to review the letter and share it with their senior executive committee and Baord, and act promptly to address any gaps or shortcomings they identify.