The UK’s Financial Services Authority (FSA) has banned Mitsui Sumitomo Insurance Company (Europe) Executive Chairman Yohichi Kumagai.

He was also fined £119,303 ($191,404).

The FSA says it took action because Mr Kumagai ignored “clear guidance” that the group’s management structure and board composition was ineffective. This resulted in the insurer being fined £3.3 million ($5.4 million).

The “significant failings of corporate governance” included Mr Kumagai’s failure to hire experienced and knowledgeable staff. For example, he failed to hire a chief underwriting officer, which hampered the firm’s ability to control expansion.

There was also a serious shortfall in management information available to the board when implementation of a new IT administration system was neither timely nor effective.

Acting FSA Director of Enforcement and Financial Crime Tracey McDermott said these failures resulted in significant sanctions for Mr Kumagai and the company.

“Senior management must take responsibility for the firms that they run,” she said. “If those who hold senior positions in financial services firms had had any doubt about how seriously we view their regulatory responsibilities, this fine and ban should make our position crystal clear.”

The FSA has also fined and banned a Scottish broker and his wife for insurance fraud.

Donald McKee Morgan was fined £335,204 ($537,289) last week for misconduct involving falsifying monthly reports and manipulating computer systems in an attempt to support his brokerage’s finances.

Although his wife and business partner Janet did not play an active part in its affairs and was unaware of any fraudulent activity, she has also been banned and censured.