"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."
The PRA has fined MS Amlin Underwriting Limited (MSAUL) £9,695,000 for failings in its governance, controls and risk management.
MSAUL is a dual PRA and FCA regulated UK insurance firm, headquartered in London.
The PRA's investigation found that MSAUL failed comply with its regulatory obligations relating to its governance and oversight of underwriting, underwriting controls, management information, data quality, and risk management strategies and systems between September 2014 and December 2019.
From September 2014, in parallel with its growth strategy, MSAUL organised its underwriting business into three strategic business units, each of which underwrote business on MSAUL’s behalf. During the relevant period the PRA noted concerns regarding the risks this, and prevailing market conditions, presented. It says there were various issues in relation to a number of MSAUL's systems, controls and processes and MSAUL failed to address these issues in an effective and timely manner during the relevant period.
The investigation found that MSAUL had failed to clearly delineate responsibilities between the first and second lines of defence, put in place appropriate and/or effective risk mitigation strategies, or embed sufficiently effective controls over underwriting.
SAUL agreed to resolve this matter and therefore qualified for a 30% reduction in the fine imposed by the PRA. Without this discount, the fine imposed by the PRA would have been £13.85 million.
Sam Woods, CEO of the PRA, said: “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. The penalty reflects the seriousness of MSAUL’s failure to meet the expected standards in this case, and should deter similar conduct by other firms.”
