London-headquartered Lloyd’s insurer MS Amlin Underwriting Limited (MS AUL) has been penalised, to the tune of £9,695,000, over its regulatory failings.
The Prudential Regulation Authority (PRA), which found MS AUL in breach of Fundamental Rules 5 and 6 of the PRA Rulebook, said: “From September 2014, in parallel with its growth strategy, MS AUL organised its underwriting business into three strategic business units, each of which underwrote business on MS AUL’s behalf.
“During the relevant period, the PRA noted its concerns regarding the risks this, and prevailing market conditions, presented. There were various issues in relation to a number of MS AUL’s systems, controls, and processes, and MS AUL failed to address these issues in an effective and timely manner during the relevant period.”
According to the regulator, MS AUL had failed to, among other things, embed a strong or effective risk culture within the business; put in place appropriate and/or effective risk mitigation strategies; establish an effective system of governance; operate an adequate data repository system and consistent data quality controls; and embed sufficiently effective controls over underwriting.
The company would have been fined £13.85 million for its PRA violations but qualified for a 30% discount after agreeing to resolve the matter.
“It is vital that firms have in place appropriate governance, oversight, and risk management controls, and that firms remediate issues identified by the PRA in a full and timely manner,” stated PRA chief executive Sam Woods. “The penalty reflects the seriousness of MS AUL’s failure to meet the expected standards in this case, and should deter similar conduct by other firms.”