FCA probes insurance broker Marsh.
MANILA, Philippines Following an investigation led by the Financial Conduct Authority (FCA) in the UK, leading insurance broker Marsh recently suspended the head of its UK aviation practice, Marcel Chad. He was replaced by Mark Costin, formerly from the Marsh aerospace team.
The FCA investigation was prompted by allegations that Marsh shared competitively sensitive information regarding its aviation insurance accounts. The FCA is likewise examining whether the Jardine Lloyd Thompson (JLT) Group, Willis Towers Watson and UIB are guilty of the same ethical violation.
This sharing of information ostensibly happened in the Philippines, when Marsh UK was accused of sending representatives from its Singapore office to meet with the top executives of a local airline. During this meeting, the Marsh executives allegedly disclosed highly confidential and proprietary information, which led to a complaint filed by one of the country's top non-life insurers before the UK High Court.
Before a final ruling could be reached, Marsh chose to settle the matter out of court. In a letter it sent to the Philippine Insurance Commission (IC) regarding the incident, Marsh UK acknowledged that its intention was to solicit the insurance business of the airline, adding that "Marsh was now able to compete" with other local insurance companies.
Headlines ( Article MRec ), pagematch: 1, sectionmatch: 1 Moreover, it stated that the purpose of the meeting was to "invite the airline to consider giving Marsh Philippines and Marsh UK an opportunity to tender for the account." Under Section 100 of the Amended Insurance Code, a reinsurance broker may tender brokerage services only to an insurer, and cannot tender insurance brokerage services or insurance services directly to a client.
The IC is reportedly looking into Marsh's apparent use of "fronting insurers" in the country, and whether this effectively makes it possible to circumvent Philippine laws and conduct business in the country without a license.