Nigerian public official fingers in multi-billion naira insurance fraud

Chuks Udo Okonta and agency report

Britain's regulator has fined insurance broker JLT Specialty (JLTSL), a unit of Jardine Lloyd Thompson, over 1.8 million pounds ($2.95 million) for conniving with a Nigerian public official to perpetuate bribery and corruption.

The Financial Conduct Authority (FCA), UK's regulator said JLTSL failed to conduct proper due diligence before entering into relationships with the official who helped the broker secure new business between 2009 and 2012.

The regulator said that during this period, JLTSL received almost 20.7 million pounds in gross commission from business provided by so-called overseas introducers, and paid them over 11.7 million pounds in return.

"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," said Tracey McDermott, the FCA's head of enforcement and financial crime.

The FCA said JLTSL had failed to respond adequately to numerous warnings.

However, the regulator noted it had found no evidence to suggest JLTSL permitted or intended to permit any illicit payment or inducement to any overseas introducer in the period.

The regulator said: "A major shareholder of the Overseas Introducer was known to JLTSL to be a Nigerian public official. The Overseas Introducer was responsible for introducing to JLTSL insurance business in West African countries.

"Even though these countries are all perceived to be higher risk jurisdictions, JLTSL did not conduct adequate searches to establish whether or not the Overseas Introducer or any of its associated individuals had any connections to the clients; and/or had any connections to a public or government official in these West African countries.

"As a Nigerian public official, it could reasonably be envisaged that the shareholder of this Overseas Introducer would have connections to West African public officials.

"However, JLTSL did not conduct adequate searches to confirm whether this was the case, or take adequate steps to counter the risk arising from any connections which it discovered."

JLTSL said in a statement it had now put in place updated policies that have been confirmed by the FCA as being appropriate.