The FCA has fined insurance broking and risk management firm JLT Speciality Limited £1.8m for failing 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 regulator says JLTSL, which is part of the Jardine Lloyd Thompson group, failed to conduct proper due diligence before entering into a relationship with partners in other countries who helped the firm secure new business.
JLTSL 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 says: “These failings are unacceptable given JLTSL 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.”
In a statement responding to the announcement, JLT says: “JLT Specialty Limited has today accepted the decision by the Financial Conduct Authority to issue it with a final notice and fine of £1.8m having found that systems and procedures put in place to mitigate the potential bribery and corruption risks associated with JLTSL’s third party relationships were inadequate during the period between February 2009 and May 2012.
“The FCA has confirmed that it has found no evidence to suggest that JLTSL permitted any illicit payment or inducement to any such third party during the period, nor that JLTSL intended to permit any such payment to be made.
“Further the FCA recognised that JLTSL made significant efforts in the relevant period to improve its systems and controls framework.
“JLTSL has since put in place updated policies that have been confirmed by the FCA as being appropriate.”