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The Financial Conduct Authority has today published Decision Notices in respect of One Call Insurance Services Limited (One Call) and its Chief Executive and majority shareholder John Lawrence Radford.
https://www.fca.org.uk/news/press-re...wrence-radford
https://www.fca.org.uk/news/press-re...wrence-radford
The Decision Notice in respect of One Call sets out that the FCA has decided to fine One Call £684,000 and impose a restriction on One Call for 121 days from the date the Final Notice is issued, so that One Call is restricted during that period from charging renewal fees to its customers, which is anticipated to cost the firm approximately £4.6 million.
The Decision Notice in respect of Mr Radford sets out that the FCA has decided to fine Mr Radford £468,600 and to prohibit him from having any responsibility for client money and/or insurer money in relation to regulated activity in financial services. Mr Radford has agreed to settle at an early stage of the investigation and therefore qualifies for a 30% discount. Were it not for this discount, the FCA would have imposed a fine of £669,531 on Mr Radford.
In the FCA’s view, One Call failed to arrange adequate protection for its client money, breaching Principle 10 of the FCA’s Principles for Businesses and the Client Money Rules. Between January 2005 and September 2014, One Call received money, in the course of its activities as an insurance intermediary, which was client money under the Client Money Rules. One Call was therefore required to ensure it protected that client money, by complying with these requirements. In the FCA’s view, it failed to do so because firstly, it failed to appreciate that certain Terms of Business Agreements it wrote business under did not provide effective risk transfer and failed to operate its client money account in accordance with the Client Money Rules. Secondly, from 1 December 2009, One Call failed to treat funds advanced by a third party premium finance provider in respect of years two and three of an annual motor policy with a subsequent two-year renewal price guarantee as client money.
As a result, One Call inadvertently spent client money, resulting in a substantial client money deficit of £17.3 million, (which it has subsequently repaid) and exposing customers to a significant risk of loss. The FCA believes that One Call inadvertently used sums from its client money bank account to finance its own working capital requirements, make payments to directors and, indirectly, to capitalise OIL, although no allegation of wrongdoing is made against OIL.
The Decision Notice in respect of Mr Radford sets out that the FCA has decided to fine Mr Radford £468,600 and to prohibit him from having any responsibility for client money and/or insurer money in relation to regulated activity in financial services. Mr Radford has agreed to settle at an early stage of the investigation and therefore qualifies for a 30% discount. Were it not for this discount, the FCA would have imposed a fine of £669,531 on Mr Radford.
In the FCA’s view, One Call failed to arrange adequate protection for its client money, breaching Principle 10 of the FCA’s Principles for Businesses and the Client Money Rules. Between January 2005 and September 2014, One Call received money, in the course of its activities as an insurance intermediary, which was client money under the Client Money Rules. One Call was therefore required to ensure it protected that client money, by complying with these requirements. In the FCA’s view, it failed to do so because firstly, it failed to appreciate that certain Terms of Business Agreements it wrote business under did not provide effective risk transfer and failed to operate its client money account in accordance with the Client Money Rules. Secondly, from 1 December 2009, One Call failed to treat funds advanced by a third party premium finance provider in respect of years two and three of an annual motor policy with a subsequent two-year renewal price guarantee as client money.
As a result, One Call inadvertently spent client money, resulting in a substantial client money deficit of £17.3 million, (which it has subsequently repaid) and exposing customers to a significant risk of loss. The FCA believes that One Call inadvertently used sums from its client money bank account to finance its own working capital requirements, make payments to directors and, indirectly, to capitalise OIL, although no allegation of wrongdoing is made against OIL.
