An island-based insurance broker has been fined almost £58,000 for failings in the way it handled clients’ money.
The regulator said these were organisational failings, as opposed to any individual wrongdoing. But it said Kestrel’s three directors during the relevant time - Alan Burrows, Kate Burrows and Paul Coniglio-Burrows - accepted overall responsibility.
The inspection by the regulator in 2018 identified a range of issues that brought into question Kestrel’s fitness and propriety.
Among those matters of concern were the operation and oversight of the client money account, the correct treatment of which the regulator said should be ’sacrosanct’.
Policy premium refunds were held in a non-client money account and the refunds were not processed in a timely manner.
Inaccurate annual registration declarations were filed and politically exposed persons were not properly identified or risk assessed.
Kestrel could not demonstrate that it had paid proper heed to the island’s anti-money laundering and countering financial terrorism legislation, the regulator found.
The company has taken significant steps since 2018 to prevent any re-occurrence of the issues identified and the regulator said it was satisfied that its registration should not be cancelled at this time.
As well as a £57,927 civil penalty, the FSA imposed a requirement that Kestrel strengthen its staffing and governance arrangements and produce an independent report confirming the changes implemented to its handling of client money.
In a statement, the company said: ’It is entirely accepted by Kestrel that some of its practices were in breach of the regulations whilst others may have fallen short of what the authority reasonably requires of persons regulated by it.
regrets
’Kestrel regrets its actions and omissions in this respect, and fully accepts that it bears responsibility.’
It said that since the FSA’s inspection in 2018, it had fully co-operated in providing information and documents as well as reviewing and improving various processes.
It added: ’Further improvements are being made in the areas of staffing and governance. As a mark of Kestrel’s commitment, Kestrel has proposed to instruct independent third parties to validate the robustness of the measures taken.
’Kestrel continues to improve and evolve in all these areas and such offer has been accepted by the authority.’
The Financial Services Authority said its action supported its statutory objectives of securing an appropriate degree of protection for policyholders, reducing financial crime and maintaining confidence in the island’s financial services and insurance and pensions industries.