2011-07-21
By Deborah Ritchie
UK insurance broker Willis Limited, a subsidiary of Willis Group Holdings, today announced that it has reached a settlement with the Financial Services Authority (FSA) for breaches of the FSA Handbook. The resolution sees Willis Limited pay £6.895m in settlement.
The findings principally concern the way in which Willis Ltd implemented and documented its controls to counter the risks of improper payments being made to non-FSA authorised overseas third parties engaged to help win business, particularly in high risk jurisdictions.
Brendan McManus, CEO of Willis Ltd since May 2011, said: “We set very high standards for ourselves as a company. We will only accept the very best practice in the systems and controls we apply to our operations. We recognise the importance of such measures in assuring ourselves and stakeholders that the risk of wrong-doing is designed out of the way we do business.”
“When we discovered some of our businesses had not got that right in the past, we were swift to engage with the FSA towards today’s regulatory resolution. Our close co-operation has been recognised by the FSA and we are grateful to them for that. It goes without saying that our compliance framework and its application across the business are now very robust and central to the leadership of the company. We can now move forward, stronger as a result.”
The FSA says: “[Willis Limited] and its senior management have co-operated with the FSA’s investigation and have demonstrated to the FSA that they treat this matter with the utmost seriousness.”
Commenting on the record fine, Tim Boyce, a partner at law firm Osborne Clarke, said: “The Willis fine shows that the FSA remains focused on getting firms to manage the risk of financial crime, particularly firms operating internationally and making commission payments overseas.
"Like the Aon fine of £5.5m in 2009, it was Willis' lack of systems and controls and management oversight which has caught the FSA's attention - although Willis has reported some suspicious transactions to the Serious Organised Crime Agency, no specific instances of bribery and corruption seem to have been identified."
This is an area where the FSA has been cracking the whip over conmmercial insurance intermediaries for some time. "It is also the latest manifestation of the increasing emphasis the FSA is putting on senior management responsibility in all authorised firms for ensuring adequate systems and controls, whether its for preventing financial crime, ensuring suitability of financial products, or protecting client money," Boyce adds.
The FSA has issued a compliance notice under s206 of the Financial Services and Markets Act, detailing the technical breaches, principally shortcomings in risk management systems between 2005 and 2008.
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