The Lloyd’s Market Association (LMA), International Underwriting Association (IUA) and London & International Insurance Brokers’ Association (LIIBA) have jointly launched a new training programme focused on non-financial misconduct (NFM) for the wholesale specialty insurance market.
The programme was developed following the Financial Conduct Authority's (FCA) 2024 report, which addressed issues related to NFM in the insurance sector and requested trade bodies to provide enhanced guidance and support to their members.
In response, the three associations have collaborated to create a unified approach, marking the first joint training initiative shared between brokers and underwriters in this market.
Delivered in collaboration with compliance consultancy Padda Consulting, the training comprises six workshops aimed at members of the three associations. An additional dedicated session will specifically target independent non-executive directors (INEDs) and non-executive directors (NEDs) of LMA, IUA and LIIBA member companies.
The session for directors and non-executives will address their specific responsibilities, including overseeing governance frameworks, understanding whistleblowing obligations and effectively challenging management on matters relating to NFM oversight, according to Chris Croft (pictured above), chief executive of LIIBA.
The training is structured around strategic responsibilities directors hold, particularly with regard to cultural risk and regulatory accountability under FCA and Lloyd’s governance standards.
In October, the FCA released the findings of its survey on NFM within the wholesale specialty insurance market.
The survey revealed a significant rise in reported NFM incidents, from 1,363 cases in 2021 to 2,347 in 2023. Bullying and harassment accounted for 26% of these incidents, while discrimination comprised 23%.
Firms primarily identified NFM concerns through formal processes like grievances and whistleblowing channels. Some also utilized internal systems for detection.
Disciplinary or other actions were taken in 43% of cases. However, the survey indicated that remuneration adjustments in response to NFM were infrequent, with reductions in fixed pay or clawbacks of vested bonuses occurring in only 1% of cases.
Approximately 38% of firms did not provide management information on NFM to their boards, and 33% lacked formal governance structures to decide outcomes for NFM cases.
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