FCA Hits JLT Specialty With £7.8M Fine

Here’s the latest from the FCA;

The Financial Conduct Authority (FCA) has fined JLT Specialty Limited (JLTSL) £7,881,700 for financial crime control failings, which in one instance allowed bribery of over $3million to take place. JLTSL is based in the UK and provided insurance broking, risk management and insurance claims services. It was part of JLT Group plc, which had a number of subsidiaries around the world.

JLTSL 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.

Between 21 November 2013 and 6 June 2017, JLTSL paid $12.3million in commission to JLT Colombia Wholesale Limited, the parent company of JLT Re Colombia, which in turn paid $10.8million to the third-party introducer. This introducer then paid over $3million to government officials at a state-owned insurer in order to help retain and secure their business for JLTSL and JLT Re Colombia.

The FCA found that JLTSL failed to manage their business and risks responsibly and effectively.

Mark Steward, Executive Director of Enforcement and Market Oversight, commented:

“Lax controls by JLT Specialty meant, ultimately, that money flowed into the pockets of corrupt officials. It is because of risks such as this that we are maintaining our focus on financial businesses’ financial crime systems, taking action where these firms fall short.”

The FCA considered that JLTSL’s self-report in June 2017 and assistance during the investigation, including providing investigators with access to materials from JLT Group’s internal investigation, were mitigating factors when determining the appropriate level of financial penalty.

BACKGROUND

Back in March 2022 Carpenter Marsh received a fine from the regulator in Colombia, reportedly for transaction issues in Ecuador. There have been accusations that business had to be done using bribes as far back as 2013, but neither the US Dept of Justice or the Serious Fraud Office has taken any action against JLT, or other insurance brokers/companies working in Colombia and Ecuador.

The case highlights the difficulties for highly regulated companies in Europe or the USA, doing business in the developing world where cash payments “to speed things up” are the norm, not the exception. In an ideal world, every company would compete fairly and follow all regulations, plus each government department in Latin America, Africa or the Middle East would award insurance contracts based on due diligence and best value for money.

It could happen.

About alastair walker 9024 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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