Press Releases

FSA report exposes weaknesses in anti-bribery and corruption controls within insurance brokers

As firms get to grips with their obligations under the new Bribery Act 2010, the FSA’s report is a timely reminder that all firms need to get their house in order and be prepared to demonstrate that sufficient “adequate procedures” have been put in place to comply with the Act.

Mark Dunn, Risk Market Planning Manager at LexisNexis says, "A key weakness highlighted by the report is the lack of sufficient systems and controls to ensure that third-party due diligence is undertaken and managed on a risk sensitive basis. The new corporate offence of failure to prevent bribery introduced by the Bribery Act effectively challenges firms to take a fresh look at their perceived exposure to third party agents and contractors representing the firm’s business. Firms are now accountable if it is found that the third parties they employ both in the UK and overseas have used bribes and other corrupt practices to generate revenues.

"Penalties for non-compliance are severe and can lead to unlimited fines, possible debarment from EU and US procurement lists and maximum 10 year prison sentences for directors found to have been supporting corrupt practices within their business. This is a real wake up call for the UK financial services sector. The FSA has already taken enforcement action against two firms within the insurance sector due to lack of anti-bribery and corruption controls and has indicated that more action is likely to follow”