The FSA has banned two insurance brokers, Andrew Porter and Alexander Brincat, from working in the financial services sector.
The regulator has also withdrawn the permissions of Brincat’s insurance firm, Wise Owl Services Limited (Wise Owl).
Porter was the sole shareholder and the only broker at Porter Insurance which specialised in providing insurance policies for businesses and individuals.
The FSA found that while a broker and director of Porter Insurance Andrew Porter had deliberately underinsured clients, retaining the surplus money for his benefit and had falsified documentation in the names of companies to mislead those clients and recipient insurance companies.
He had also exposed companies to the risk of significant financial loss by misleading them into paying for cover, which, unknown to them, was neither suitable nor appropriate for their business needs, leading them to be underinsured.
The FSA said it considered Porter’s dishonest conduct to be serious because he abused the trust and confidence his clients and recipient insurance companies placed upon him, exposing the clients to significant financial losses. He posed a risk both to consumers and to insurance companies, and to confidence in the financial system.
Brincat was the sole director and a shareholder of Wise Owl, a small firm specialising in insurance policies for buildings and life insurance.
The FSA found that between September 2009 and August 2010 Brincat had failed to monitor adequately the high cancellation rate of life insurance policies sold by Wise Owl, and failed to disclose to Wise Owl’s insurance providers that it had a sales strategy of offering free life cover to customers.
Brincat had left the country for prolonged periods without putting in place adequate compliance arrangements at Wise Owl and failed to ensure that Wise Owl had sufficient resources to pay premiums due to customers who had agreed to the free life cover offered by Wise Owl, and repay sums of commission claw back owed to insurance providers when such cover was cancelled.
He also failed to monitor Wise Owl’s financial position, including the extent of Wise Owl’s liabilities to insurance providers.
The regulator said Brincat’s failings are serious due to the significant losses incurred by Wise Owl’s insurance providers, and his abandonment of the authorised business. The FSA has therefore decided to ban him from performing any function in relation to any regulated activity.
Tracey McDermott, acting director of enforcement and financial crime commenting on both cases, said: “Andrew Porter deliberately underinsured clients
