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FSA fines insurance broker £6.9m for anti-corruption failings

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FSA fines insurance broker £6.9m for anti-corruption failings

The Financial Services Authority (FSA) has fined insurance broker Willis Limited £6.9 million for anti-bribery and corruption systems and controls failings.

According to the FSA these failings created an unacceptable risk that payments made by Willis Limited to overseas third parties could be used for corrupt purposes. Between January 2005 and December 2009, Willis made payments totalling £27 million to overseas third parties who helped it win and retain business from overseas clients.

According to the FSA these clients were predominantly from ‘high risk’ jurisdictions.

The FSA investigation found that, up until August 2008, Willis Limited failed to:

  • Ensure it established and recorded an adequate commercial rationale to support its payments to overseas third parties
  • Ensure that adequate due diligence was carried out on overseas third parties to evaluate the risk involved in doing business with them
  • Adequately review its relationships on a regular basis to confirm whether it was still necessary and appropriate for Willis Limited to continue with the relationship

The fine is the biggest imposed by the FSA in relation to financial crime systems and controls. It would have been £9.85 million but Willis qualified for a 30% discount as it agreed to settle with the FSA at an early stage.

During the FSA investigation, Willis identified a number of suspicious payments, totaling $227,000 (£140,536) which it made to two overseas third parties. These were made in respect of business carried out in Egypt and Russia and have been reported to the Serious Organised Crime Agency.

Tracey McDermott, acting director of enforcement and financial crime, said Willis’ failings were ‘disappointing’ given repeated FSA warnings to firms to guard against payments made to overseas third parties being used for corrupt purposes.

‘The involvement of UK financial institutions in corrupt or potentially corrupt practices overseas undermines the integrity of the UK financial services sector,’ said McDermot. ‘The action we have taken against Willis Limited shows that we believe that it is vital for firms not only to put in place appropriate anti-bribery and corruption systems and controls, but also to ensure that those systems and controls are adequately implemented and monitored.’

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