MGA’s new enforcement guidance

The MGA has come out with a guidance note to bring clarification around how it makes use of its discretionary powers in the selection of scope and nature of enforcement steps it takes when it uncovers breaches of the law.
The contents of the note are of particular interest to licence holders as they describe the conditions and activities which the Authority gives a close look to during its decision-making processes, which include the interactions that take place between the Authority and the licence holder in breach.
The enforcement measures taken by the MGA start off with a warning, which is given when “the breach in question does not directly undermine the achievement of one of the regulatory objectives set out at law” and the behaviour of the licence holder involves one or more mitigating circumstances.
The Authority imposes an administrative penalty when one or more regulatory objectives are challenged by the breach; and, or the breach committed does not challenge one or more regulatory objectives, but the behaviour of the licence holder involves one or more aggravating circumstances; and, or the licence holder’s recent compliance track has not been, in general, sufficiently good.
MGA will move to suspend a licence when it finds issues that may challenge the ability of the authorised person to run its operations in a manner compliant with the legislation that applies in those circumstances. However, such issues may be resolved if the licence holder commits to undertake appropriate corrective action.
MGA will cancel the licence when the operations of the licence holder are affected due to some systemic issues which the Authority believes cannot be addressed in a way that will be satisfactory to allow the license holder to resume operations.
At the end, when it comes to breaches that are criminal in nature, the factors stated above, as well as mitigating and aggravating circumstances will guide the judgment of the Authority as to whether a regulatory settlement can be offered to the offending party or to opt for initiation of criminal proceedings.
Aptly, the Authority also reserves the right to publish the sanctions it imposes.
This note should help the license holders get more clarity on how MGA functions.