This report follows the Financial Services Authority’s 2010 report on Anti-bribery and corruption in commercial insurance broking and our subsequent regulatory guidance and enforcement action. It sets out the findings of our thematic review into how small wholesale insurance intermediaries (intermediaries) manage their bribery and corruption risks.
The purpose of this review was to assess how the sector had responded to the specific issues identified in the Financial Services Authority report in 2010 on Anti-bribery and corruption (ABC) in commercial insurance broking and our subsequent work, and consider whether intermediaries were adequately addressing bribery and corruption risk across their business.
We looked at intermediaries’ bribery and corruption risk assessments and considered how this risk was controlled through intermediaries’ governance, due diligence and ongoing monitoring of individual relationships, payment controls, recruitment and remuneration, training and awareness, incident reporting and whistleblowing.
Overall, most intermediaries in our sample did not yet adequately manage the risk that they might become involved in bribery or corruption. More than half of the intermediaries in our sample had taken some steps to assess and manage bribery and corruption risk, but for the majority of these intermediaries, this work was still in progress and more had to be done before their ABC systems and controls would be effective.
This review is not only relevant to wholesale insurance intermediaries. All firms subject to our financial crime rules in SYSC 3.2.6R or SYSC 6.1.1R may find this useful.
We provided individual feedback to each firm in our sample. In addition, We are also updating our Financial crime: a guide for firms with examples of good practice we have observed. We are consulting on these changes to our guidance.
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