News

GFSC issue a £7k fine on a NED - Stephen Paul Dewsnip (“Mr Dewsnip”) - 27 July 2020

21/08/2020

On 27 July 2020, the Guernsey Financial Services Commission (the “Commission”) decided:

  1. To impose a financial penalty of £7,000 under section 11D of the Financial Services Commission Law on Mr Dewsnip; and
  2. To make a public statement under section 11C of the Financial Services Commission Law.

The Commission considered it reasonable, proportionate and necessary to make these decisions having concluded that Mr Dewsnip failed to fulfil the minimum criteria for licensing under Schedule 7 to the Insurance Law.

AGGRAVATING FACTORS
  1. The actions of Mr Dewsnip could have seriously put at risk the payment of claims to policyholders and therefore could have posed a risk to the reputation of the Bailiwick as an international finance centre.
BACKGROUND
  1. Mr Dewsnip was a non-executive director of Global Insurance Group Limited (“GIGL”), which was licensed under the Insurance Law. Mr Dewsnip was a director of GIGL from 21 December 2011 to 25 August 2016.
  2. Under an agreement between GIGL and a United Kingdom intermediary (which had some common ownership with GIGL) (“Intermediary A”),
    • Intermediary A issued insurance policies on behalf of GIGL.
    • Intermediary A was also able to collect premiums from policyholders on behalf of GIGL and retain a portion of the premiums as a loss fund to pay claims on behalf of GIGL (“the Claim Fund”).
    • Bordereaux reports (a list, or summary, of policies issued and premiums charged and/or claims paid) should have been prepared monthly by Intermediary A and net premium settlements made quarterly to GIGL.
THE GFSC VISIT
  1. The Commission conducted a risk assessment visit to GIGL in July 2017 (“the July 2017 Visit”).
  2. As a result of the July 2017 Visit, the Commission had concerns over GIGL’s oversight of functions outsourced to Intermediary A, in particular the management of the Claims Fund.
  3. The Commission also found that GIGL had not conducted any audit of the activity carried out by Intermediary A and could not adequately monitor the solvency of GIGL due to the frequency of reporting from Intermediary A.
  4. GIGL began to request that the payments be regularised from November 2015 onwards.
  5. However, regular payments from Intermediary A were not forthcoming.
  6. The outstanding amounts were only paid to GIGL after intervention by the Commission and after investment into Intermediary A by a third party. This called into question the liquidity of GIGL’s major asset.
FINDINGS
  1. As a director of GIGL, Mr Dewsnip failed to ensure the implementation of effective systems of control, in particular in relation to the Claims Fund held by, and the Bordereaux reporting from, Intermediary A.
  2. As a director of GIGL, Mr Dewsnip also failed to ensure that the amounts due from Intermediary A were paid to GIGL in a timely manner.

https://www.gfsc.gg/news/article/stephen-paul-dewsnip