The Financial Conduct Authority (“FCA”) has fined an insurance broker £7,881,700 for financial crime control failings, which in one instance allowed bribery of over $3m to take place.
The UK based firm provided insurance broking, risk management and insurance claims services and had a number of subsidiaries around the globe.
It was found that between 21 November 2013 and 6 June 2017, the firm paid $12.3m in commission to a parent company which in turn paid $10.8m to the third-party introducer. This introducer then paid over $3m to government officials at a state-owned insurer in order to help retain and secure their business.
The FCA found that the firm failed to manage their business and risks responsibly and effectively.
Mark Steward, Executive Director of Enforcement and Market Oversight, commented that ‘lax controls’ had ultimately meant that ‘money flowed into the pockets of corrupt officials’ as he highlights that it is because of these types of risks that the FCA are maintaining ‘focus on financial businesses’ financial crime systems, taking action where these firms fall short.’
We would advise firms to ensure that they are consistently monitoring and reviewing their finance crime controls.