Last week, one of London’s oldest insurance brokers, Willis Limited (“Willis”), was fined by the UK Financial Services Authority (“FSA”) for failing to counter the risks of bribery and corruption. The £7 million penalty was handed down to Willis in the FSA’s Final Notice (PDF/80.3KB/24 pages) on 21 July 2011.
Conduct
- From 2005 to 2009, Willis made payments totalling £27 million to overseas third parties for assistance in winning business from overseas clients.
- Employees failed to be adequately monitored by Willis to make sure that, when engaging an overseas third party, they conduced sufficient due diligence and recorded adequate commercial rationale for any payment.
- Information flow to Willis’ senior management was inadequate and did not allow effective assessment in relation to mitigation of bribery and corruption.
Penalty
- The £6.895 million penalty is a record fine to date by the FSA in relation to financial systems and controls.
- Due to co-operation and early settlement by Willis, a 30% discount had been applied by the FSA.
Notes
- This represents a civil sanction under Principle 3 of the FSA’s Principles for Businesses and Rule SYSC 3.2.6 R of the FSA’s Senior Management Arrangements, Systems and Controls Handbook.
- It will be interesting to see how FSA’s regime complements or conflicts with the new UK Bribery Act 2010 (“Bribery Act”). Had the Bribery Act been in force at the time of this conduct, it is likely that these payments could have led to a criminal prosecution.