JLT Specialty fined £7.8m for allowing bribed deals into London market

The UK's top financial regulator has slapped £7.8 million in fines on JLT Specialty for a relapse on oversight problems that allowed business secured through bribery abroad to be placed on the London market, a statement from the Financial Conduct Authority (FCA) indicates.

Amid shortcomings in centralised oversight, deals initially gained via bribery made it through JLT’s Columbian unit to the London market, the FCA indicated. JLT Specialty earned £4.8 million in commissions on £93.4 million in gross written premium on 87 placements for the unspecified partner.

"The breach revealed a serious gap in JLTSL's [JLT Specialty] systems and controls and created a significant risk that financial crime, particularly bribery and corruption, would be facilitated," the FCA wrote in its judgment.

JLT failed to ensure that all material information on foreign-generated business was collected, then ignored red flags that should have come to the attention of its Know-Your-Client and financial crime prevention teams.

JLT only became aware of the issue when parties involved in the scam were later prosecuted and convicted in the US.

The FCA can cite 466 placements in the London reinsurance market for 40 different overseas insurers and 106 different insured clients where JLT left oversight to local units and "did not carry out any additional monitoring" centrally between late November 2013 and early June 2017. That left "unacceptable risk" of a Columbia-style event, the FCA notes.

JLT was acquired by Marsh McLennan after the incident period and after the notification to the FCA of the suspected crimes.

The FCA would have set the fine at £11.3 million but it reduced the final sum on account of the move by JLT to notify authorities and early.

Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.