Also on the FCA's radar this month is a recently completed piece of follow up work on Appointed Representatives (ARs), that will be of interest to both principal firms and ARs themselves. In July last year, the FCA conducted a thematic review of AR relationships in the general insurance sector, and found many shortcomings. This month, it has released the findings of follow up work showing:
- Widespread failings in how principals are overseeing relationships with their ARs. In particular, the review found that firms are not giving adequate consideration to the impact of an AR's appointment on their business, and are often not undertaking adequate due diligence.
- Problems with ARs involved in the sale of warranty insurance products.
While the second issue is clearly insurance-specific, firms across all sectors would do well to take note the more general findings. In our view, it's entirely possible that this sectoral review could form the basis of a wider FCA inquiry into AR relationships - especially since the regulator wasn't happy with what it found.