PRA Fines HDI Global SE £4.165 Million Over Inaccurate Regulatory Data

LONDON — The Prudential Regulation Authority has fined HDI Global SE £4.165 million after finding that the insurer repeatedly submitted inaccurate regulatory information.

The incorrect submissions were made on several occasions between August 2021 and August 2024. The PRA said some of the inaccurate information was supplied while the company was attempting to correct previous errors.

The data concerned liabilities covered by the Financial Services Compensation Scheme and information used to calculate the firm's contribution to the scheme.

The FSCS protects eligible customers when authorised financial companies are unable to meet certain financial obligations. Regulated firms contribute to the scheme through levies.

According to the PRA, inaccurate reporting can prevent regulators from identifying material risks and may result in a company paying less than the correct FSCS levy.

The regulator said HDI Global failed to exercise sufficient skill, care and diligence when calculating the figures. Before the summer of 2023, the company had not adequately consulted relevant rules and guidance concerning which liabilities were covered and how tariff information should be calculated.

The PRA also identified weaknesses in written procedures, accountability, internal oversight and challenge. It concluded that these deficiencies allowed incorrect information to remain in regulatory submissions.

HDI Global has since introduced remedial measures, submitted corrected historical data and paid additional FSCS levies required to address the reporting errors.

The company participated in the PRA's Early Account Scheme, providing a detailed account of the circumstances surrounding the breaches. The regulator said this assistance was taken into consideration when calculating the penalty.

HDI Global agreed to resolve the case and received a 30 per cent reduction in the financial penalty. Without that reduction, the fine would have been £5.95 million.

The PRA said accurate, complete and timely regulatory data is essential because it helps supervisors assess risks, monitor compliance, calculate levies and make decisions concerning financial stability.

HDI Global SE is the UK branch of an international insurance company headquartered in Hanover, Germany. Its UK operations are regulated by both the PRA and FCA.

The enforcement action reinforces the responsibility of financial firms to maintain reliable systems, written controls and clear accountability for information submitted to regulators.