Why every broker should be worried at Hastings’ £735,000 fine.
A record £735,000 fine for failing to treat customers fairly could not have come at a worse time for Hastings. Parent company IAG is trying to sell the broker, and little could be more embarrassing than the headlines created by this very public dressing down from the regulator. And the liabilities could spiral fair higher than the initial fine, with Hastings facing compensation claims from thousands of customers.
But the story does not stop there. It is significant that this is the highest fine the FSA has ever handed out to an insurance intermediary – and had IAG UK chief executive Neil Utley not owned up and committed to solving the problem quickly, he could have faced an even bigger fine of up to £1.5m.
This will be the first of many. According to market observers, the FSA is taking an increasing interest in insurance intermediaries. It has recently tightened up on mortgage brokers, and now it is casting its gaze further afield.
Gary Dixon, managing director of Resources Compliance, says: “I would expect quite a lot more action from the FSA – this is a real indication that they are starting to back up their words with actions.”
