Structural governance weaknesses under scrutiny

A cloud descended on Sun Life Assurance Company of Canada (UK) during October in the form of a £600,000 fine and final notice from the FSA for poor oversight of its with-profits funds. Yet again the regulator is honing in on firms’ governance, this time in relation to the need for clear structures and reporting lines. It doesn’t take much time to get these right, say Steven Francis and Imogen Hurst.

Steven Francis is a partner and Imogen Hurst an associate with law firm RPC (Reynolds Porter Chamberlain). Contact them at steven.francis@rpc.co.uk and imogen. hurst@rpc.co.uk.

The FSA has disciplined Sun Life Assurance Company of Canada (UK) Ltd over failures in the administration and governance of its with-profits funds. The firm was fined £750,000, reduced to £600,000 following a 20% discount for early settlement. The final notice has very significant ramifications for all financial services firms, in particular because of the manner in which it addresses structural governance weaknesses within firms, even when those weaknesses do not appear to be the cause of risk management errors or customer detriment.