Former IAG UK CEO Neil Utley has been banned from the Lloyd’s market for two years after settling two charges of detrimental conduct.

The charges were brought in October 2011 and relate to Mr Utley’s spell from 2005 to 2010 as CEO of Equity Syndicate Management – the trading name of Equity Red Star and managing agent of Lloyd’s Motor Syndicate 218.

Lloyd’s says Mr Utley failed to ensure sufficient corporate governance and effective controls were in place, particularly concerning the syndicate’s reserving processes, and failed to ensure the Equity board had comprehensive management information regarding the adverse development of claims payments.

During the five-year period the company posted heavy losses that cost IAG hundreds of millions of dollars in writedowns and reserve strengthening. 

Along with an official censure, Mr Utley has been banned from serving as a director of any Lloyd’s firm for two years and must pay £130,000 ($193,000) to cover Lloyd’s costs in bringing the action against him.

Lloyd’s says it took into account several mitigating factors: Mr Utley’s behaviour was not “deliberate, wilful or reckless”; he had not “behaved in a dishonest manner”; and he made no “personal financial gain as a result of the facts and matters admitted by him”.

It says he “co-operated fully” with the investigation and settled the proceedings without the need for a hearing.

“It is not alleged by Lloyd’s that the facts and matters admitted by Mr Utley were the cause of the increase in claims notified to the syndicate,” the market said.

“Nor is it the case that any policyholders have suffered loss.”

Mr Utley – now Chairman of motor broker and underwriter Hastings Insurance, which he acquired from IAG as part of a management buyout in 2008 – says he is “keen to put this matter behind me and move forward”.

“Lloyd’s notes that this was a period of difficult conditions across the entire motor market and… that none of the matters reviewed caused any increase in claims or loss to policyholders,” he said.

“Having resolved all of these regulatory issues I will now be free to devote my time and attention to building on the considerable success we have enjoyed at Hastings.”

Equity settled its case with Lloyd’s last January, while cases against former active underwriter John Josiah and former commercial director Douglas Morgan are ongoing.