It may have been plain sailing for Bluefin Insurance since its takeover by Marsh – but today the insurance broker has been stung with a significant fine relating to its past ownership.
The Financial Conduct Authority (FCA) has fined the firm an eye-catching £4,023,800 for having “inadequate systems and controls” and for failing to provide information to its customers about its independence “in a way that was clear, fair and not misleading.”
The issue relates to the fact that, according to the FCA, from March 09, 2011-December 31, 2014, Bluefin held itself to be “truly independent” in terms of the advice it offered and the insurers it recommended despite the fact that it was then owned by AXA UK Plc.
According to the FCA’s statement on the matter Bluefin “failed to implement adequate systems and controls to manage the conflict that arose from Bluefin’s ownership. Bluefin’s independence was compromised by its culture which promoted business strategies, including a policy which focused on increasing the business placed with its parent company, over treating customers fairly.
“Bluefin brokers did not disclose this policy, so customers risked being misled into believing they were dealing with a broker who would conduct an unbiased search of the market.”
The regulator did point out, however, that it makes no criticism of any member of AXA Group other than Bluefin itself.
“Insurance brokers must promote a culture in which they act in their customers’ best interests and provide them with the information they need to make an informed decision,” noted Mark Steward, executive director of enforcement and market oversight. “This is central to the relationship between the industry and its customers.
“It is also unacceptable that firms hold themselves out as independent when they are not.”