FSA fines insurer £3.3m for corporate governance failings – The Financial Services Authority (FSA) has fined wholesale insurer Mitsui Sumitomo Insurance Company (Europe) £3.3m for serious corporate governance failings.
It has also imposed a ban and fine of £119,303 on its former executive chairman, Yohichi Kumagai.
The company is the London-based subsidiary of Japanese insurance firm Mitsui Sumitomo Insurance Company (Japan), which is part of one of the world’s largest non-life insurance groups.
The regulator said Kumagai had failed to ensure key posts at the company were filled with staff who had the necessary experience, knowledge and time to fulfil their roles effectively.
For example, he failed to hire a chief underwriting officer, a factor which then hindered the firm’s ability to control the expansion of the business.
Overall the company had significant failings in corporate governance and control arrangements which resulted in it being poorly organised and managed across its business as a whole.
Tracey McDermott, acting FSA director of enforcement and financial crime, said: “Kumagai failed to respond adequately to the changing risks facing his business even after they had been pointed out by the FSA.
“If those who hold senior positions in financial services firms had had any doubt about how seriously we view their regulatory responsibilities this fine and ban should make our position crystal clear.”
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