The FCA has published a “Dear CEO” letter on its expectations of principal firms operating in the general insurance sector.

In the letter, the FCA refers to the publication of the results of its thematic review into the supervision by principal firms of their appointed representatives in the general insurance sector

The review found widespread shortcomings in principal firms’ awareness and understanding of FCA rules and guidance and compliance with the requirements.

The FCA states that it expects the CEO recipients of the letter to share it with their firm’s board or equivalent in order to improve awareness of the key findings of the thematic review, given the FCA’s “significant concerns”.

The FCA states that it expects a principal firm to:

• Consider the contents of the thematic review report;

• Assess whether it can demonstrate how it is meeting FCA requirements in relation to its appointed representatives, as set out in the FCA Handbook; and

• Identify any shortcomings in its
  1. Risk management frameworks;
  2. processes and practices in relation to meeting its responsibilities; and
  3. Obligations for its appointed representatives.

A copy of the letter is available here.