FSA has fined Mitsui Sumitomo Insurance Company (Europe) Ltd (the firm) £3,345,000 and has banned its former executive chairman, Yohichi Kumagai, and fined him £119,303. It found the firm had significant failings in corporate governance and control arrangements, and Mr Kumagai had failed to ensure key posts at the firm were filled by staff with appropriate experience, knowledge and time. The firm, a London-based subsidiary of a Japanese insurer, had expanded its traditional business of insuring Japanese firms operating in Europe and the Middle East to a broader geographical base. Mr Kumagai was seconded from Japan as part of a normal staff rotation process. He had little experience of non-Japanese insurance business and of UK regulation. FSA had written to the firm stressing the need for an experienced board to oversee the expansion of the business, and the importance of improving systems and controls. It found Mr Kumagai failed to take action despite its guidance, and appeared more concerned to achieve profitability for the expanded business than to impose the necessary controls. In mitigation, it found he resigned once he recognised he had not taken sufficient steps properly to manage the business. Tracey McDermott said firms must appropriately adapt their corporate governance and controls to reflect changes in their risk profile. She also said: “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”. (Source: FSA Bans Executive Chairman of Wholesale Insurer and Imposes Fines of Almost £3.5 million on the Firm)
Register Now As you are not an existing subscriber please register for your free daily legal newsfeed service.Register
If you have any questions about the service please contact firstname.lastname@example.org or call Lexology Customer Services on +44 20 7234 0606.
FSA fines firm and bans executive chairman for corporate governance failings
If you are interested in submitting an article to Lexology, please contact Andrew Teague at email@example.com.
“I make an effort to read at least several articles each day and regularly share the particularly relevant or interesting articles with my colleagues. I greatly appreciate the inclusion of the Lexology service by the State Bar of...
“I make an effort to read at least several articles each day and regularly share the particularly relevant or interesting articles with my colleagues. I greatly appreciate the inclusion of the Lexology service by the State Bar of Texas and have recommended that my friends and colleagues join the Corporate Counsel Section of the State Bar in order to obtain this service for themselves.”
Edward J. Willey III
Huawei Technologies (USA)