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Britain’s markets watchdog fines insurance broker JLT Specialty $10 million
Global Banking & Finance Review®
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(Reuters) – Britain’s Financial Conduct Authority on Wednesday fined insurance broker JLT Specialty 7.9 million pounds ($9.66 million) for financial crime control failings, which in one instance allowed bribery of more than $3 million to take place.
(Reuters) – Britain’s Financial Conduct Authority on Wednesday fined insurance broker JLT Specialty 7.9 million pounds ($9.66 million) for financial crime control failings, which in one instance allowed bribery of more than $3 million to take place.
The watchdog found that JLT Specialty, which is based in Britain, failed to manage its business and risks responsibly and effectively.
The broker placed business in the London reinsurance market for JLT Re Colombia, another company in the JLT group. The business had been introduced by a third party based in Panama.
JLT Specialty paid $12.3 million in commission to JLT Re Colombia’s parent company, which in turn paid $10.8 million to the third-party introducer.
This introducer then paid over $3 million to government officials at a state-owned insurer in order to help secure business for the JLT companies.
The financial crimes took place between November 2013 and June 2017.
“Lax controls by JLT Specialty meant, ultimately, that money flowed into the pockets of corrupt officials,” Mark Steward, Executive Director of FCA’s Enforcement and Market Oversight said.
The FCA previously fined the broker 1.9 million pounds in December 2013 for similar risk control failures around overseas introducers and bribery and corruption.
JLT was bought by rival Marsh in 2019.
“This matter relates to a former employee of JLT who pleaded guilty to charges arising from actions that took place in Ecuador from 2014 – 2016, prior to the acquisition of JLT in 2019,” a Marsh spokesperson said by email.
“In early 2018, JLT voluntarily reported this matter to law enforcement authorities. As previously disclosed, we have cooperated fully with the investigation by the FCA and are pleased to put this matter behind us.”
($1 = 0.8180 pounds)
(Reporting by Shanima A in Bengaluru and Carolyn Cohn in London; Editing by Anil D’Silva and Jane Merriman)
Financial crime refers to illegal activities that involve the manipulation of financial systems or assets, including fraud, money laundering, and bribery.
Compliance in finance involves adhering to laws, regulations, and guidelines set by regulatory bodies to ensure ethical and legal operations within financial institutions.
A regulatory framework consists of the rules, regulations, and guidelines that govern financial institutions and ensure they operate within the law.
Bribery is the act of offering, giving, receiving, or soliciting something of value to influence the actions of an official or other person in charge of a public or legal duty.
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