Guernsey Insurance Brokers Ltd, Mr Richard Julian Wickins and Mr David John Merrien (2016-09-02)

Summary

This is an amended Public Statement issued by the Guernsey Financial Services Commission (GFSC) under section 11C of the Financial Services Commission Law, describing enforcement action taken against Guernsey Insurance Brokers Limited (GIBL), its former Managing Director Mr Richard Wickins, and its former Compliance Officer and Authorised Insurance Representative Mr David Merrien. The Commission found serious regulatory failings, including unsuitable and dishonest investment advice by Mr Merrien and inadequate systems of control at GIBL, and imposed financial penalties, licence conditions and prohibition orders.

• Financial penalties: £8,000 imposed on GIBL and £8,000 on Mr Wickins (each reflecting a 20% early-acceptance discount); no financial penalty ultimately imposed on Mr Merrien because he is imprisoned, has no income or assets, and has no foreseeable ability to pay.
• Licence conditions on GIBL: GIBL required to appoint additional directors (so as to have at least two directors besides Mr Wickins, and never fewer than three directors) within three months of the conditions being imposed, and to maintain that minimum thereafter.
• Director qualification requirement: Mr Wickins required to obtain the Institute of Directors' Certificate in Company Direction (or an equivalent qualification acceptable to the Commission) within 18 months of the conditions being imposed, and to provide evidence of this to the Commission; failing achievement by 31 July 2016, he was barred from acting as a GIBL director until he obtained and evidenced the qualification.
• Prohibition orders: Mr Merrien prohibited from performing any function in relation to business carried on by any entity licensed under the Regulatory Laws, and disapplied from the section 3(1)(g) Fiduciary Law exemption.
• Restrictions on Mr Wickins: Prohibited from performing any function relating to controlled investment business or long-term insurance intermediary business, and from acting as controller, partner, director or manager of a long-term insurance licensee; no restriction was placed on his general insurance business activities.

The underlying decision was originally made on 3 December 2014 but was amended following Royal Court and Court of Appeal proceedings brought by Mr Merrien, culminating in the Commission's decision of 30 August 2016 not to impose a financial penalty on him. GIBL has since surrendered its licences for controlled investment and long-term insurance business and transferred its clients to another intermediary, so the statement is now primarily a historical record of the enforcement outcome rather than a source of ongoing compliance duties.

Key obligations

• GIBL was required to appoint additional directors so as to have at least two directors besides Mr Wickins, and thereafter never fewer than three directors, within three months of the conditions being imposed
• Mr Wickins was required to obtain the Certificate in Company Direction (or equivalent qualification approved by the Commission) within 18 months of the conditions being imposed and to provide evidence of this to the Commission
• Mr Wickins was barred from acting as a director of GIBL after 31 July 2016 unless and until he obtained and evidenced the required qualification
• Mr Merrien was prohibited from performing any function in relation to business carried on by any Commission-licensed entity
• Mr Wickins was prohibited from performing any function relating to controlled investment business or long-term insurance intermediary business

Applies to

insurance intermediaries, insurance managers, licensees under the Insurance Managers and Insurance Intermediaries Law, licensees under the Protection of Investors Law, Authorised Insurance Representatives, directors of licensed firms

Deadlines

• within three months of the date of the imposition of these conditions: GIBL required to appoint sufficient directors to have at least two apart from Mr Wickins, and never fewer than three thereafter
• within 18 months of the date of the imposition of these conditions: Mr Wickins to obtain the Certificate in Company Direction or equivalent qualification and provide evidence to the Commission
• 31 July 2016: Deadline by which Mr Wickins had to achieve the required qualification or else be barred from acting as a GIBL director until he did so