The European arm of one of Japan’s biggest insurers was today fined £3.35 million by the City regulator and its former executive chairman was given a lifetime ban on working in the City.
The Financial Services Authority said Mitsui Sumitomo Insurance Company failed to put the right systems in place and recruit senior enough people as it rapidly expanded across Europe.
Yohichi Kumagai, who was fined £119,000, was seconded to the European business from Japan in 2009. The FSA said he had limited knowledge of non-Japanese insurance and UK regulations.
Shortly after his appointment the FSA wrote to him warning that Mitsui’s rapid expansion into European markets needed careful oversight.
But he failed to recruit executives with enough experience and a new IT system did not work efficiently.
Tracey McDermott, acting director of enforcement and financial crime, said: “Senior management must take responsibility for the firms that they run. Kumagai failed to respond adequately to the changing risks facing his business even after they had been pointed out by the FSA.”
The FSA said the firm’s fine and Kumagai’s fines would have been higher, at £4.78 million and £170,000, if they had not agreed to settle at an early stage. The firm’s fine is the fourth largest imposed by the FSA this year.
