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Press release:

Ref: OGI0237
1st March 2011

Brokers Urged to Take Sanctions Checking Seriously

Open GI, BIBA and Alan Blunden Insurance Brokers have joined forces to warn firms of the implications of not adhering to Government guidelines for client screening.

Since the requirement to check clients against the HM Treasury Financial Sanctions list before a policy is sold was introduced, RBS Group have been fined £5.6m for failing to have adequate systems and controls in place. If firms do not adhere to these guidelines they may face imprisonment for facilitating terrorist financing.

Nick Blunden, Director, Alan Blunden & Co. said: “The requirement imposed upon us by the UK financial sanctions regime prohibits us from providing funds (which could be a return premium) or financial services to any individual who is on the HM Treasury Financial Sanctions list. Insurers for our ABACUS scheme business are now regularly requesting details of how we are complying with these obligations.

“We have struggled to find a solution that enables us to easily monitor whether we are dealing with a sanctioned individual at Point of Sale and have, therefore, been relying on a mainly manual process. This has been incredibly time consuming as the financial sanctions list changes almost every other day and the data held on the list is rarely complete.

“The news that Open GI have developed a real-time facility to address this issue is incredibly welcome. They have dealt with the ‘patchy’ data provided on the sanctions list by returning a percentage chance of a match with information on the top five matches. The FSA published a report in April 2009 which reiterated the requirement for all firms, whatever their size, and the penalties for non-compliance. The Open GI solution is simple and will ensure that we are doing our utmost to avoid any such issue in the future."

Chris Guillaume, Managing Director, Open GI, said: “Since launching our Sanctions Checking Module last year, client screening has become a hot topic amongst our broker base. What is apparent, is the level of awareness is extremely varied. Some firms are alarmingly unphased by the implications and seem ill prepared to tackle the issue, whereas others are switched onto it and are keen to find a solution - Alan Blunden being one such example.

“What is also apparent is the number of misconceptions surrounding sanctions checking. There is a view that it’s only larger brokers that need to adhere to the guidelines, but that’s not the case, it’s a requirement for all brokers. There’s also a misconception that there are only a limited number of individuals on the list. However, it runs into the thousands due to different spellings, aliases and addresses, and furthermore it’s dynamic. Our overriding objective has been to support brokers, and the speed to market in which we have delivered the technology demonstrates this.”

Steve White, Head of Compliance and Training, BIBA, said: “It’s very encouraging that a large player in the software house market has recognised the seriousness of sanctions checking and is providing an effective mechanism to support brokers. Technology offers an ideal solution as the sanctions list is constantly changing. It also provides an audit trail for the FSA.

“At BIBA we are working hard to raise awareness of sanctions checking across the industry as it’s a very serious issue and one which is probably being underestimated. We actively endorse Open GI’s work in this area and would encourage our members to consider again the procedures they use to adhere to Government guidelines."

For More Information about Open GI:
Adele Clarkson
Marketing and PR Manager
Open GI
Tel: 01905 754455
email: adele.clarkson@opengi.co.uk

Notes to Editors:

Open GI supplies market leading IT solutions to insurance brokers across the UK & Ireland. With 25,000 users in around 2,000 firms, the company has a 40% share of the UK broker market and is committed to technological innovation.

Open GI technology enables personal and commercial lines brokers trading in standard and niche markets to streamline business activity and become more profitable. With a workforce of 300 people and a 30-year heritage, the company enjoys a strong financial performance. For the year ended 31st May 2009 Open GI reported revenues of £32.0 million and an operating profit of £17.9 million