The Bank of England has placed Lloyd’s of London under special measures after Lloyd’s discovered shortfalls in its whistleblowing programme.

It is the latest embarrassment for the insurance marketplace, which is trying to stamp out bad behaviour after a series of harassment and bullying allegations were made this year.

It has emerged that a key whistleblowing hotline serving 1,000 staff was suspended for 16 months, meaning workers had no avenue to report wrongdoing anonymously between October 2017 and February this year.

The failure affected workers for the Lloyd’s corporation, an administrative body that oversees the wider Lloyd’s marketplace. The larger marketplace is made up of about 400 insurance and broker members who each have their own whistleblowing measures in place.

Like many companies, Lloyd’s had outsourced its corporate whistleblowing hotline to an external firm. It failed to replace the contractor in autumn 2017.

While employees had access to an app and email inbox to report concerns over that period, the phone line was the only anonymous whistleblowing channel available to staff. Workers who called the hotline after September 2017 were told to call Lloyd’s own HR team.

It is understood that no whistleblower reports were made to Lloyds via app or email over the period the phone line was down.

Lloyd’s reported the failure to the Bank’s Prudential Regulation Authority (PRA) and the Financial Conduct Authority in February. City regulators later discovered Lloyd’s had also failed to compile a mandatory annual report on its whistleblowing programme, meant for internal use.

Lloyd’s has now been ordered to submit regular reports on its whistleblowing programme to the PRA over the next three years. The special reports will cover the type of whistleblowing training offered to staff and senior management, the number of whistleblower reports received, and the tally of whistleblowing cases opened and investigated each year.

A Lloyd’s spokesperson said: “We are extremely disappointed by this failure in our internal controls, which serves to remind us all about the need for constant vigilance when it comes to these essential services.

“Lloyd’s employees can feel confident that we now have all the right mechanisms in place for them to report any wrongdoing, and that these systems are regularly monitored.”

The wider Lloyds marketplace has been rocked by bullying and harassment allegations that have sparked calls for a cultural overhaul.

A survey released in September found that nearly 500 respondents had either suffered or observed sexual harassment in the past 12 months. More than 6,000 people responded to the survey, which was sent out to 45,000 workers including thousands of underwriters and brokers.

It prompted the creation of a separate confidential helpline for staff in April, and the marketplace has since launched a poster campaign to try to stamp out unacceptable behaviour.

The survey was commissioned to gauge the scale of problems after Bloomberg reported evidence from 18 women alleging widespread sexual harassment, ranging from inappropriate remarks to physical assault.