The Financial Conduct Authority (FCA) has fined insurance broker JLT Specialty £1.8m for an "unacceptable" approach to bribery & corruption risks from overseas payments.
The firm failed to have in place appropriate checks and controls to guard against the risk of bribery or corruption when making payments to overseas third parties, the FCA said.
JLT, which provides insurance broking and risk management services, was found to have failed to conduct proper due diligence before entering into a relationship with partners in other countries who helped it secure new business, known as overseas introducers.
JLT also did not adequately assess the potential risk of new insurance business secured through its existing overseas introducers.
FCA director of enforcement and financial crime Tracey McDermott said: "These failings are unacceptable given JLT actually had the checks in place to manage risk, but didn't use them effectively, despite being warned by the FCA that they needed to up their game. Businesses can be profitable but firms must ensure that they take the necessary steps to control the risks in that business.
"Bribery and corruption from overseas payments is an issue we expect all firms to do everything they can to tackle. Firms cannot be complacent about their controls - when we take enforcement action we expect the industry to sit up and take notice."
JLT's failure to manage the risks created by overseas payments, which occurred between 19th February 2009 and 9th May 2012, breached the FCA's principle on management and control.
During this period, JLT received almost £20.7m in gross commission from business provided by overseas introducers, and paid them over £11.7m in return.
Inadequate systems around these payments created an unacceptable risk that overseas introducers could use the payments made by JLT for corrupt purposes, including paying bribes to people connected with the insured clients and/or public officials.
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