Important FSA update: anti-bribery and corruption in Commercial Insurance Broking
The FSA has published its final report following its thematic review of anti-bribery and corruption risks in the commercial insurance broker industry. The review was implemented by the FSA following the £5.25M it imposed on Aon in January 2009 in connection with anti-bribery and corruption risks.
Four key messages emerge from the FSA's feedback:
- The FSA is underwhelmed by the approach taken by firms so far, finding that firms have "approached higher risk business involving third parties far too informally and many firms are still not operating at acceptable standards". A summary of common weaknesses identified by the FSA can be viewed here.
- The FSA expect a clear and demonstrable response from brokers at a number of different operational levels. The FSA identify 9 key operational areas within a broking business that should have anti-bribery and corruption controls. It is important that firms can demonstrate they have considered what needs to be improved in each of these areas and have taken any necessary steps.
- In the short to medium term the FSA will undoubtedly have this topic on their agenda whenever they make supervisory contact with broker firms, through ARROW visits or otherwise.
- Many of the regulatory principles identified by the FSA are relevant to other types of firms that use third parties to help win business. This note is therefore not just relevant to the immediate subject of the FSA's review (commercial insurance brokers) but any insurance intermediary.
Lawyers James Crabtree, Peter Kempe, Anthony Menzies, Jonathan Rogers, Dr. Gunbritt Kammerer-Galahn, Christoph Janssen, Dr. Astrid Wagner, Wolfgang Schaller, Christine Flion, Christopher Dixon, Alain de Foucaud
