In the UK, it is a criminal offence under the Bribery Act 2010 for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK, or a Scottish partnership to bribe anywhere in the world. There are 4 key offences established by the Bribery Act 2010:
- Offering, promising, or giving of a bribe to another person
- Requesting, agreeing to receive, or accepting a bribe
- Bribery of a foreign (non-UK) public official and
- Failure by commercial organisations to prevent bribery committed by their associated persons to obtain or retain business, or an advantage in the conduct of business
To trigger these offences, the conduct can take place anywhere in the World, and not just the UK.
For managing agents, a delegated authority is an "associated person" under the Bribery Act and corrupt actions by managing agents’ associated parties no matter where located would be caught by the Bribery Act. Managing agents need to therefore manage the bribery and corruption risk posed by delegated authorities to the same level as if the business were being written directly by themselves.
It will be for managing agents to assess the appropriateness of their delegated authority’s’ controls at the time of onboarding and during the relationship, basing their assessment on risk factors such as geographical, business sector and products to determine the level of exposure to bribery and corruption risk. Delegated authorities should implement policies and processes agreed with the managing agent to appropriately manage any exposure.
Examples of controls for managing agents and delegated authorities to consider include the monitoring of expenses and payments to third parties as well as to foreign public officials and politically exposed persons and of commissions to intermediaries. Approval processes and reporting related to gifts and entertainment should also be considered alongside escalation processes to managing agents of suspicious activity.
Consideration should be given to the following examples of how bribery and corruption could occur in delegated authority business:
- Kickbacks for Business: Bribes to brokers or clients to secure business, influencing the decision-making process.
- Facilitation Payments: Making small payments to expedite or secure routine governmental actions, such as obtaining licenses or permits.
- Improper Influence: Offering gifts, entertainment, or other incentives to influence the underwriting or claims process.
- Corrupt Relationships: Establishing relationships with government officials or other influential parties to gain an unfair advantage in regulatory or competitive matters.
- Bid Rigging: Colluding with other parties to manipulate the bidding process for insurance contracts.