Guernsey’s Financial Services Commission has fined Generali Worldwide Insurance Company £150,000 for what it said were “failings in systems and controls” that occurred between 2008 and 2010.

Generali Worldwide is an arm of the Trieste, Italy-based Generali Group, one of the world’s largest insurance companies. It is a separate company from Generali International, and focuses on “group employee benefit solutions”, targeting international companies in particular.

The fine was revealed today in a statement on the commission’s website, which said the company had failed to comply “with certain reporting requirements relating to its regulatory margin of solvency” and on the adequate definition of an investment strategy”, as set out in the Licenced Insurers’ Corporate Governance Code.

• http://www.gfsc.gg/The-Commission/News/Pages/Generali-Worldwide.aspx

This, it said, had resulted in its “summaries of adherence” to its corporate government principles  in 2009 and 2010 being “inaccurate”.

Generali Worldwide had also failed to

• comply with certain reporting requirements relating to its “relationship risk assessment” process and
• for falling short in its duties to notify staff of a change in its money laundering reporting officer.

The GFSC said it had taken into account certain mitigating factors in the case, including the fact that since an on-site visit in August 2011 and a subsequent “extensive examination”, Generali Worldwide had taken a “proactive approach to dealing and remediating with” its concerns.

It also noted that no policyholders had suffered a loss as a result of the failures it had identified.

In a statement, Generali Worldwide noted that the matters flagged up by the GFSC related to

• “certain specific and limited administrative issues dating back to a period three to five years ago” which, it noted, even the commission acknowledged had all been “comprehensively addressed and dealt with” by Generali Worldwide some time ago.
• “As the commission acknowledges, no policyholder suffered any loss,” the statement added.
•  “No policyholder’s funds were ever at risk. The company was at all times and remains still substantially and more than healthily capitalised, and has continued to develop and expand its business throughout the period” in question.

Read the GFSC statement

http://www.gfsc.gg/The-Commission/News/Pages/Generali-Worldwide.aspx

Generali Worldwide Insurance Company Limited

1. The Financial Services Business (Bailiwick of Guernsey) Law, 1987, as amended (“the Financial Services Commission Law”)
2. The Insurance Business (Bailiwick of Guernsey) Law, 2002, as amended (“the Insurance Law”)
3. The Criminal Justice (Proceeds of Crime) (Financial Services Businesses) (Bailiwick of Guernsey) Regulations, 2007, as amended (“the Regulations”)
4. The Handbook for Financial Services Businesses on Countering Financial Crime and Terrorist Financing (“the Handbook”)
5. Generali Worldwide Insurance Company Limited (“Generali Worldwide”)

Summary

1. On 15 November 2013 the Guernsey Financial Services Commission (“the Commission”) decided:
a. To impose a financial penalty of £150,000 on Generali Worldwide under Section 11D of the Financial Services Commission Law; and
b. To make this public statement under Section 11C of the Financial Services Commission Law.

Background

6. Following an on-site visit in August 2011, the Commission undertook an extensive examination of Generali Worldwide’s systems and controls.
Reasons
7. At various times during the period 2008 to 2010, failings in systems and controls occurred in the following areas:
a. The Licensed Insurers’ Corporate Governance Code
b. Generali Worldwide did not comply with certain reporting requirements relating to its regulatory margin of solvency and on the adequate definition of an investment strategy.  Thus, the summaries of adherence to the corporate governance principles submitted by Generali Worldwide for the years 2009 and 2010 were inaccurate.
The Regulations and Handbook
8. Generali Worldwide failed to comply with certain requirements related to the Relationship Risk Assessment and failed to notify its staff timely of a change in the Money Laundering Reporting Officer.

Mitigating Factors

9. Since the on-site visit and the subsequent extensive examination, Generali Worldwide elaborated a risk mitigation plan, and implemented changes as a result in the processes and in the control functions that have addressed these failings.  Moreover Generali Worldwide supported all the costs related to the examination performed by the Commission.
10. No policyholder has suffered actual loss as a result of the failures identified.
11. The Commission has taken Generali Worldwide’s proactive approach to dealing and remediating with its concerns into consideration in determining the appropriate regulatory action