Willis Group Is Fined $11 Million by U.K.’s FSA Over Suspicious Payments

Willis Group Holdings Ltd., the world’s third-largest insurance broker, was fined 6.9 million pounds ($11 million) by financial regulators for failing to prevent $227,000 in possible bribes.

The suspicious payments were a portion of 27 million pounds the company paid “to overseas third parties who assisted it in winning and retaining business from overseas clients,” between 2005 and 2009, the Financial Services Authority said in a statement today.

Willis is conducting a “past-payment review” and must report any further findings of corrupt payments to the Serious Organised Crime Agency, said Sarah Bailey, an FSA spokeswoman.

The Serious Fraud Office, which prosecutes corruption in the U.K., didn’t open its own investigation “but we discussed this case with the FSA early on,” spokesman David Jones said. “Both bodies agreed that the solution was a regulatory approach and the FSA took it forward.”

Nick Oborne, a spokesman for London-based Willis, declined to immediately comment on whether the company reported the payments to the U.S. Department of Justice, which prosecutes overseas corruption under the Foreign Corrupt Practices Act.

“The involvement of U.K. financial institutions in corrupt or potentially corrupt practices overseas undermines the integrity” of the country’s finance industry, Tracey McDermott, the FSA’s acting head of enforcement, said in the statement.

Fine Reduction

Willis qualified for a 30 percent reduction in its fine after cooperating with the FSA, the agency said.

“When we discovered some of our businesses had not got that right in the past, we were swift to engage with the FSA towards today’s regulatory resolution,” Brendan McManus, chief executive of the company’s U.K. unit, said in a statement.

The FSA began a review of anti-bribery systems and controls at commercial insurance brokerages in late 2008. It fined insurance broker Aon Ltd. 5.25 million pounds in 2009 for failing to prevent a number of suspicious payments to overseas firms and individuals between 2005 and 2007.

The agency said last month it is opening a review into whether investment banks have systems and controls in place to prevent their employees from paying bribes to win business.

To contact the reporters on this story: Ben Moshinsky in London at bmoshinsky@bloomberg.net; Lindsay Fortado in London at lfortado@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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