’Early disclosure of unverified facts and negative media coverage could create a prejudicial environment with guilt presumed,’ says director

The International Underwriting Association (IUA) has hit out at FCA plans to name companies which have been subject to an enforcement compliant.

The organisation, which represents (re)insurers in the London company market, has said it is strongly opposed plans to publish details of future regulatory investigations before they reach their conclusion.

Under proposals announced by the FCA in February 2024, details of ongoing enquiries into alleged misconduct would be made publicly available.

The plans have been condemned by a wide range of financial services and business organisations, which say the move could harm the integrity of the sector at a time when the regulatory burden continues to increase.

And the IUA warned that such a move had the potential to encourage market speculation, cause irreparable reputational damage and drive firms to financial hardship, even though they may subsequently be found innocent of any charges.

Helen Dalziel, IUA director of public policy, said: “The concept of ‘innocent until proven guilty’ is a fundamental doctrine of criminal law and the mere association with an ongoing investigation could cause substantial harm to a firm’s standing in the market.”

’Unwarranted perception’

In its response, the IUA also warned that premature publication of investigations may create an “unwarranted perception of systemic problems within the financial services industry, impacting other companies not subject to enquiries”.

“If individuals are named and shamed before the outcome of an investigation is determined, there is a real danger that the possibility of a fair trial by an impartial tribunal would be impeded,” Dalziel added.

”Early disclosure of unverified facts and negative media coverage could create a prejudicial environment with guilt presumed.

“Publishing any investigations that have not been fairly concluded is only likely to erode, rather than encourage, trust and confidence in financial services.”

The IUA’s response also suggested that many investigations do not actually lead to any enforcement action.

“A number of powers are already available to the authority that its own annual report illustrates effective enforcement of regulations,” it stated.