The Financial Conduct Authority (FCA) has fined insurance broker JLT Specialty Ltd £7,881,700. for financial crime control failures, which in one case, the CFA said, enabled the bribery of more than $3 million.
JLT Specialty, which is based in the UK, was part of JLT Group plc, which had a number of subsidiaries around the world. In 2019 JLT Group plc was acquired by Marsh & McLennan Companies, Inc.
The FCA found that JLT Specialty “failed to manage its business and risks responsibly and effectively” during the period from November 21, 2013 to June 6, 2017.
JLT Specialty has placed business in the London reinsurance market for JLT Re Colombia, another JLT Group company. The company had been introduced by a third party based in Panama. Between November 2013 and June 2017, JLT Specialty paid $12.3 million in commission to JLT Colombia Wholesale Limited, the parent company of JLT Re Colombia, which in turn paid $10.8 million to the third-party introducer. This introducer then paid over $3 million to government officials from a public insurer to help them retain and secure their business for JLT Specialty and JLT Re Colombia.
“JLT Specialty’s lax controls ultimately meant that money was flowing into the pockets of corrupt officials. It is because of such risks that we continue to focus on the financial crime systems of financial firms, taking action where these companies fail,” commented Mark Steward, Executive Director of Enforcement and Market Surveillance at CFA.
The FCA said it considered JLT Specialty’s self-declaration in June 2017, assistance during the investigation and its settlement agreement at an early stage of the investigation qualified it for a 30% discount on the original fine of £11,259,500.
The FCA said it had already fined JLT Specialty £1,876,000 in December 2013 for similar risk control failures relating to foreign introducers and bribery and bribery.
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