A broker formerly owned by the insurer AXA UK Plc was fined Wednesday for failing to disclose that it wasn’t independent but instead had a business strategy to sell AXA products.
The UK Financial Conduct Authority fined Bluefin Insurance Services Limited £4 million ($5.35 million).
From March 2011 until the end of 2014, Bluefin held itself out as an independent broker. But during that time it tried to “achieve ‘synergies’ with its shareholder ahead of treating customers fairly,” the FCA said.
That meant steering business customers toward AXA insurance products.
The broker introduced every small and medium business customer needing renewals to AXA before showing them other prospective insurers, the FCA sad.
Bluefin didn’t disclose its business strategy to customers. It led them to believe they were dealing with “truly independent” brokers, the FCA said.
When owned by AXA, Bluefin had about 1,500 agents in 45 locations around the UK serving more than 150,000 business and individual customers. Annual revenue was more than £100 million ($133 million).
Marsh & McLennan acquired Bluefin from AXA at the end of 2016. The independence offenses had stopped at the end of 2014.
The FCA’s Mark Steward said it is “unacceptable that firms hold themselves out as independent when they are not.”
“Insurance brokers must promote a culture in which they act in their customers’ best interests and provide them with the information they need to make an informed decision,” Steward said.
The FCA said Wednesday it “makes no criticism of any member of the AXA Group other than Bluefin.”
Bluefin received a 30 percent discount on its fine because it settled early in the investigation, the FCA said.
The Financial Conduct Authority’s December 5, 2017 Final Notice against Bluefin Insurance Services Limited is here (pdf).
Richard L. Cassin is the publisher and editor of the FCPA Blog.