FSA hits Willis with record fine for anti corruption failings

The UK's Financial Services Authority has hit Willis Limited, the UK arm of world's third largest insurance broker, with a record £6.9 million fine for anti bribery and corruption failings, related to commissions paid overseas.

Willis Limited, the UK arm of Willis Group, was accused of failing sufficiently to monitor £27 million of payments overseas third parties who had helped the company win new business.

The fine comes less than a month after the introduction of the UK Bribery Act, which introduced tough new laws on third party (or 'associated persons' in the language of the act) activities in foreign countries. The law requires all companies to have policies in place to prevent improper payments.

The fine is the result of Willis agreeing to settle at an early stage in the investigation, and so earn a 30 per cent reduction on the original £10 million fine.

Willis emphasised that the FSA made no finding that the broker or third parties were engaged in any unlawful acts.

The FSA said £27 million in payments that Willis had made to third parties may have been used to help it win and retain business between 2005 and 2009. Willis was said to have failed to ensure adequate records of the payments or undertake necessary due diligence on the associated persons used.

The FSA focussed in particular on £227,000 in payments made to two overseas parties regarding business in Egypt and Russia.

CEO of Willis Limited Brendan McManus said the broker had swiftly engaged with the authorities once the problem was recognised.

"Our close co-operation has been recognised by the FSA and we are grateful to them for that," McManus said.

"It goes without saying that our compliance framework and its application across the business are now very robust and central to the leadership of the company. We can now move forward, stronger as a result."

The Serious Fraud Office was passed one the case by the FSA, but decided not to investigate the case any further.

Willis is not the only insurance company to have had run-ins with the authorities. AON, one of Willis's competitors, was fined £5.25 million in 2009 over suspected corruption in Asia, Europe and the Middle East.

Sources: AFP, the Guardian, Financial Times

For more information, please see the Menas ACCS website, here.