The FSA has slapped a £1.2m fine on General Reinsurance UK Limited (GenRe UK) for improper reinsurance transactions.
The watchdog found GenRe UK had breached FSA principles by arranging the two transactions.
In both these cases, the regulator discovered that GenRe UK did not have sufficient systems and controls in place to prevent the deals. They had enabled one insurer to gain from tax benefits and the second was used to compensate for premium reduction on a reinsurance programme agreed with a client insurer by GenRe UK.
Margaret Cole, Director of Enforcement said: "The FSA expects firms involved in reinsurance business to observe proper standards of conduct, act with due skill, care and diligence and to ensure that they and their staff structure and manage transactions appropriately.
If GenRe UK had not reported the transactions to the FSA, and agreed to settle at an early stage, it would have been fined £1.75m.
