A life insurance provider has been hit with a £1.95 million fine by the Isle of Man Financial Services Authority (FSA) after an inspection revealed serious failings in its anti-money laundering (AML) systems.
The FSA said the sanction follows a routine inspection of RL360 in February 2023, during which a number of breaches of the Anti-Money Laundering and Countering the Financing of Terrorism Code 2019 were identified.
The initial penalty was £2.78 million but was reduced by 30% in recognition of RL360’s early cooperation, remedial actions and positive engagement with the regulator.
The fine is one of the largest imposed by the FSA and comes as the Isle of Man’s financial sector prepares for a crucial Moneyval evaluation in 2026, a review which will scrutinise its effectiveness in tackling financial crime.
Key issues flagged in the FSA’s report include weaknesses in RL360’s assessment of money laundering and terrorist financing risks, failures in customer due diligence, and inadequate monitoring of high-risk clients.
Among the most serious findings was that RL360’s Business Risk Assessment did not properly assess financial crime risks specific to each business entity.
Its Customer Risk Assessments were also found to lack detail and failed to consistently account for risk factors such as client location or the type of product offered.
In several cases, the company could not provide evidence that sufficient checks were made when onboarding high-risk customers. Ongoing monitoring processes were also found to be lacking, with some trigger events - such as significant changes in customer behaviour or circumstances – not properly reviewed.
Documentation for politically exposed persons (PEPs) and other high-risk individuals was often incomplete or missing, while some internal policies, such as annual reviews for high-risk customers, were not followed.
Despite these failings, the regulator acknowledged RL360’s response.
The company has already taken steps to strengthen its systems and processes and launched an extensive remediation programme.
The FSA said RL360’s willingness to engage constructively had played a significant role in determining the final penalty.
A statement from the Authority stressed the importance of firms carrying out detailed and up-to-date risk assessments and ensuring compliance with both internal procedures and regulatory requirements.
It warned that failure to properly monitor high-risk customers could expose businesses – and the jurisdiction – to serious reputational damage.
The FSA also reiterated that compliance with the AML Code is a legal obligation for all regulated entities and forms a cornerstone of the Isle of Man’s international reputation as a well-regulated financial centre.
In determining the size of the penalty, the FSA said it had considered RL360’s income, the severity of the contraventions, and the mitigating factors. It also noted that the fine should not be interpreted as a direct comparison with other penalties issued in the past, as each case is assessed on its own merits.
RL360 is authorised as an insurer under the Insurance Act 2008 and operates in international markets from its base in the Isle of Man.
The full public statement is available on the Financial Services Authority’s website.