’Firms must maintain effective systems and controls to ensure the integrity of data submissions,’ says executive director
The Prudential Regulation Authority (PRA) has fined insurer HDI Global SE £4,165,000 for submitting incorrect data to the regulator over three years.
The PRA said this occurred on multiple occasions between August 2021 and August 2024, with the data relating to Financial Services Compensation Scheme (FSCS) Liabilities and FSCS Fee Tariff.
According to the UK regulator, the errors in HDI Global SE’s submissions arose and persisted because of its “failure” to apply due skill, care and diligence to ensure that the data was calculated correctly.
”Prior to the summer of 2023, HDI Global SE failed to check the PRA rulebook or guidance as to what liabilities are covered by the FSCS and the methodology for the calculation of the components of the FSCS Fee Tariff data,” the PRA added.
”HDI Global SE also had no effective written processes that would ensure that such calculations were carried out to any reliable standard and there was a lack of clear accountability, internal oversight and challenge, reflecting a failure in organising and controlling its affairs responsibly and effectively. These failures resulted in inaccurate data being provided to the PRA.”
’Remediation initiatives’
The PRA said misreporting of FSCS Liabilities may hinder its ability to identify material risks and may also result in a firm underpaying any applicable levy to the FSCS.
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HDI Global SE has now implemented a number of remediation initiatives and has submitted corrected historical data and paid additional levies required to date by the FSCS to remedy the errors in respect of FSCS Fee Tariff data.
”HDI Global SE produced a detailed and thorough account as to the facts and circumstances leading to the breaches,” the regulator said.
“This materially assisted the PRA’s investigation and is something the PRA gave credit for when determining the financial penalty.”
In turn, the firm qualified for a 30% reduction in the amount of the financial penalty, which otherwise would have been £5,950,000.
Gareth Truran, executive director for insurance supervision at the PRA, said: “The PRA relies on firms submitting accurate, complete and timely data to assess risks, monitor compliance, inform prudential decisions, and ensure that FSCS levies are correctly calculated.
”Firms must maintain effective systems and controls to ensure the integrity of data submissions. This is fundamental to achieving the PRA’s safety and soundness objective.”
His career began in 2019, when he joined a local north London newspaper after graduating from the University of Sheffield with a first-class honours degree in journalism.
He took up the position of deputy news editor at Insurance Times in March 2023, before being promoted to his current role in May 2024.View full Profile
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