Enforcement action

FCA fines round-up

FCA regulatory fines for 2018 now total  £27.6m. The following fines and related enforcement actions have been announced in the past month:

Liberty Mutual Insurance Europe SE On 30 October, the FCA fined Liberty Mutual Insurance Europe SE (Liberty) £5,280,800 for failures between 5 July 2010 and 7 June 2015 in its oversight of its mobile phone insurance claims and complaints handling processes administered through a third party.

Liberty is a large UK insurer who entered into a relationship in the UK with a third party to enable them to provide mobile phone insurance to retail customers. The third party undertook all administrative functions associated with the mobile phone insurance on Liberty’s behalf including all claims and complaints handling functions. Liberty retained regulatory responsibility for ensuring that claims and complaints made by customers were handled fairly, and ought to have ensured that it had in place adequate systems and controls to oversee the activities of the third party throughout. The FCA determined Liberty did not have such systems and controls in place.

Liberty’s customers were exposed to the possibility that their claims and complaints would not be handled fairly. During the relevant period some claims were unfairly declined or not investigated adequately. Some customers who complained about this had the original decision overturned which created a de facto two-stage claims process and others had complaints dismissed without a proper investigation having been undertaken.

Prior to the commencement of the FCA Enforcement investigation, a voluntary redress and remediation exercise was undertaken by the third party in conjunction with Liberty in relation to claims which may have been unfairly rejected. The total amount of redress offered to customers who may have suffered detriment was nearly £4 million. This was taken into account in calculating the fine.

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