GenRe fined £1.225 million by Financial Services Authority
City watchdog, the Financial Services Authority (FSA), meted out one of its biggest fines ever in November. General Reinsurance UK Limited (GenRe) was fined £1.225 million for arranging two improper reinsurance transactions and for breaching two FSA principles. They were: FSA Principle 2 - not conducting its business with due skill, care and diligence; and Principle 3 - not organising and controlling its affairs responsibly and effectively.
The first transaction, signed in 1999 and renewed three times, allowed a German insurer to gain tax benefits after transferring money between Ireland and Germany. A second transaction, signed in 2004, was used to compensate for a premium reduction on a reinsurance programme agreed with a client insurer.
The FSA ruled that in both cases, GenRe did not have controls in place to stop the deals.
Commenting on the case, FSA director of enforcement Margaret Cole said: "Both conventional and finite reinsurance transactions should only be used where there is a legitimate commercial purpose and sufficient risk transfer. The FSA will take robust action against reinsurance firms and their staff who act in contravention of these basic principles."
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
European banks search for consensus on credit spread risk
New EBA guidelines spawn diverging interpretations of which products must be assessed for CSRBB
Dutch regulator in new push on algo manipulation
AFM teams up with Oxford Uni academics to develop data models that will identify “harmful” collusion in automated trading
Fed relief plan for G-Sib agency clearing welcomed
Rollback may revive interest in European FCM model, as principal clearing still treated punitively
Indian initial margin launch brings operational headaches
Conglomerates with multiple entities trading derivatives pose compliance challenges for dealers
Fed’s new liquidity rule spells more pain for regional banks
Limit on HTM assets follows move to deduct unrealised losses from capital buffers
Ruled out: can regulators settle the pre-hedging debate?
Market participants are at odds over the practice and whether regulation or principles can settle the score
SEC streamlines overhaul of stock trading rules
Tick size and access fee rules simplified from first draft, but Peirce still questions rationale
Supervisors use generative AI to tame ‘chaotic’ data
Officials merge credit databases with unstructured reports to sharpen bank oversight, explains Banco de España ex-deputy
