Central Bank fines FBD €490,000 over code breaches

The Central Bank has fined FBD Insurance almost €500,000 for a number of breaches of the consumer protection code between 2006 and 2011.

Regulators began an investigation after FBD owned up to the breaches and provided a report to the bank.

Among the breaches identified were a failure to ensure entities it had outsourced regulated activities to were compliant with the code; inform consumers that the loss adjusters it had appointed were working in the interests of FBD Insurance; have adequate complaints handling procedures in place and pass relevant information on to consumers about their right to complain and take the matter further to the ombudsman; and provide terms of business documents or other relevant information to consumers.

FBD has already taken steps to rectify the matter, which the Central Bank said was taken into account when it imposed the €490,000 fine. No customers lost out financially as a result of the breaches, FBD said, and regulators said the matter was considered closed.

“While we are obviously very disappointed that these breaches occurred, we are satisfied that they are legacy issues,” FBD said in a statement. “We are pleased that the Central Bank has confirmed that the appropriate remedial action was promptly taken by FBD. Most importantly we are confident that no customer was financially disadvantaged.”

The Central Bank said it was “unacceptable” for firms to outsource regulated activity without appropriate oversight, and said it expected companies to exercise “due skill and care” when entering into outsourcing arrangements.

This is the 13th settlement that firms operating in Ireland have agreed with the Central Bank over breaches of the code.

"The Central Bank views the implementation of proper systems and controls by firms to ensure compliance with the Consumer Protection Code as a fundamental requirement. The existence of inadequate systems and controls, incomplete procedures and/or a failure to employ effective resources is an unacceptable risk to the Central Bank due to the potential for consumer detriment," said director of enforcement Derville Rowland.