Ths FSA has stripped Walsall Bridge Insurance Consultants of its permission to carry on regulated activities after it found the firm had failed to pass on received client premiums to insurers, leaving clients uninsured, and used the money to run the day-to-day activities of its business.
The FSA has also banned the company's sole director, Geoffrey Thomas Robbins, from conducting any further regulated business after finding him not fit and proper to work in the general insurance industry.
The regulator found that since March 2005, due to financial difficulties, Walsall had failed to arrange insurance policies and to pass over the premiums of its clients to the insurers and intermediaries.
This resulted in 19 clients being left without insurance and one client incurring losses which were uninsured. In addition Walsall had charged at least 6 clients inflated premiums for insurance. As a result premiums owed by Walsall to insurers currently exceed £140,000.
Director Geoffrey Thomas Robbins also admitted to providing clients with misleading information about their policies and falsely obtaining loans to meet the cost of insurance premiums but failing to use it for this purpose.
Margaret Cole, Director of Enforcement at the FSA said: "The FSA will not tolerate insurance brokers who put customers at risk by failing to ensure their clients have appropriate cover. To take client premiums and then fail to arrange insurance is not acceptable practice. We will take enforcement action to stop any behaviour that leads to consumer detriment."
The case was viewed as particularly serious by the FSA as Walsall failed to inform the regulator about Walsall's financial difficulties when it knew, or ought to have known, that it did not have adequate resources.
Following a supervisory visit to Walsall in March 2006 the FSA was informed that Walsall was insolvent and Robbins ceased trading with immediate effect.
Recent Related News
Brokers to bear brunt of FSA funding proposals
FSA confirms client money review
IIB blasts FSA
