Insurance broker JLT Specialty whacked with £1.8m fine from FCA

City regulator the Financial Conduct Authority (FCA) has said this morning that it's fined JLT Specialty (JLTSL) over £1.8m for an "unacceptable" approach to bribery and corruption risks from overseas payments.

The regulator said the insurance broker and risk management company failed "to have in place appropriate checks and controls to guard against the risk of bribery or corruption when making payments to overseas third parties."

The firm, which is a subsidiary of Jardine Lloyd Thompson Group, did not carry out proper due diligence before entering into relationships with oversees countries that helped it secure new business, said the FCA.

Between February 2009 and May 2012 JLTSL received nearly £20.7m in commission from business provided by oversees introducers, paying them over £11.7m in return.

Tracey McDermott, the FCA's director of enforcement and financial crime, said:

These failings are unacceptable given JLTSL actually had the checks in place to manage risk, but didn’t use them effectively, despite being warned by the FCA that they needed to up their game. Businesses can be profitable but firms must ensure that they take the necessary steps to control the risks in that business.

Bribery and corruption from overseas payments is an issue we expect all firms to do everything they can to tackle. Firms cannot be complacent about their controls – when we take enforcement action we expect the industry to sit up and take notice.

JLTSL has said this morning that it has accepted the FCA's fine.

It added that the regulator has confirmed that no evidence was found to suggest that the firm permitted any illicit payment to third parties during the time period, nor that it "intended to permit any such payment to be made."

The company said it now has updated policies in place that have been confirmed by the FCA as "being appropriate".