FCA revokes Glasgow-based broker’s permissions to operate after fair value reporting failure

The FCA has removed Glasgow-based broker L R Kennedy Insurance Services’ permissions to carry out regulated activities after the firm ignored repeated requests from the regulator to comply with fair value reporting.

In a statement published on 25 April 2025, the FCA’s enforcement and market oversight division confirmed that it had cancelled L R Kennedy Insurance Services’ part 4A permissions to perform regulated activities, effective from this date.

The document stated: “It appears to the authority that the firm is failing to satisfy the suitability Threshold Condition, in that the firm is not a fit and proper person to conduct regulated activities.

“Specifically, the firm has failed to be open and cooperative in all its dealings with the authority – as a result, the authority is not satisfied that the firm’s business is being, or will be, managed in such a way as to ensure that its affairs will be conducted in a sound and prudent manner.”

The broker was first authorised by the FCA in January 2005 for “insurance distribution, consumer credit and designated investment business activities”.

Lack of communication

The circumstances leading up to the FCA’s decision followed the regulator’s work on general insurance pricing practices and the introduction of its fair value ethos in January 2022.

This regulatory change included eliminating the practice of price walking, also known as the loyalty penalty, in the personal home and motor markets.

Within the new rules, the regulator required general insurance firms “to submit an attestation which confirms that their pricing of products is compliant with the new requirements” – to this end, it sent out an online questionnaire to be completed by March 2022.

According to the FCA, L R Kennedy Insurance Services did not complete this questionnaire and subsequently failed to respond to multiple correspondence from the regulator over 2022, 2023 and 2024 regarding the survey’s completion and complying with the new rules.

Therefore, in November 2024, the FCA warned the broker that it was considering enacting enforcement action against it. L R Kennedy Insurance Services did not respond to this notice by the FCA’s deadline of 28 November 2024, failing “to either submit the outstanding returns or to voluntarily apply to cancel its part 4A permission”.

This ultimately led to the cancellation of L R Kennedy Insurance Services’ permissions.

The April 2025 statement concluded: “[The firm] has failed to comply with Principle 11 – relations with regulators – in that the firm has failed to deal with the authority in an open and cooperative way.

“Furthermore, the firm has not demonstrated that it is ready, willing and organised to comply with the requirements and standards under the regulatory system.”