Insurance giant fined £8.2m for breaking Financial Conduct Authority rules

INSURANCE giant Aviva has been fined £8.2m for breaking Financial Conduct Authority rules.

The FCA fined Aviva, which has a large office in Birmingham, for failings in its oversight of its outsourced providers and not providing sufficient protection of client assets.

Aviva failed to put in place appropriate measures which would ensure that investors got their money back should the company have failed between January 1, 2013 and September 2, 2015, said the authority.

The FCA also found deficiencies with Aviva’s internal reconciliation process which resulted in the under- and over-segregation of client money. It said that during the period from February 10, 2014 to February 9, 2015 under-segregation peaked at £74.4m.

The fine could have been considerable heftier as ​​Aviva agreed to settle at an early stage and therefore qualified for a 30% discount.

Without the settlement discount, the fine would have been £11.8m.

It also said that although it considered the failings to be serious, there was no actual loss of money or assets.

However, had Aviva suffered an insolvency event during the period, customers could have suffered losses due to Aviva’s non-compliance with the rules.

Mark Steward, director of enforcement and market oversight at the FCA said: “Aviva outsourced the administration of client money and external reconciliations in relation to custody assets, but failed to ensure that it had adequate controls and oversight arrangements to effectively control these outsourced activities.

“Firms are reminded that regulated activities can be delegated but not abdicated.”

Aviva has since apologised for the failings, and said that it worked closely with the FCA throughout the review.

Andy Briggs, chief executive officer of Aviva UK Life, said: “We fully accept the findings of the FCA’s review. This should not have happened and we are sorry. Aviva’s customers have not suffered any loss and there has been no impact on advisers.

“We have addressed and resolved the issues identified. We have made improvements to ensure we have clear oversight of the processes undertaken on the adviser platform, and remain vigilant in our continued monitoring through a dedicated and expert team.”