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FSA bans two insurance brokers for misconduct

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The FSA has banned two insurance brokers for underinsuring clients and offering free life cover without informing providers.

Andrew Porter was the only broker at Porter Insurance which specialised in providing policies for businesses and individuals.

The FSA found that Porter had deliberately underinsured clients and retained the surplus money for his benefit. He also misled companies into paying for unsuitable cover, and falsified documents to mislead client firms and insurers.

In a separate case, the FSA has also banned Alexander Brincat, and withdrawn the permissions of his firm Wise Owl Services.

Brincat was the sole director of Wise Owl, which specialised in life cover and buildings insurance.

The regulator found that between September 2009 and August 2010 Brincat failed to disclose to providers about the company’s strategy to provide free life cover to customers, and failed to monitor the high cancellation of policies sold by the firm.

Brincat also left the country for prolonged periods without putting in adequate compliance arrangements. He also did not ensure Wise Owl had sufficient resources to pay premiums for customers who had agreed to free life cover, and failed to pay clawback commission when cover was cancelled.

He also failed to monitor Wise Owl’s financial position and its liabilities to insurers.

FSA acting director of enforcement and financial crime Tracey McDermott says: “Andrew Porter deliberately underinsured clients, many of whom were involved in high risk trades. He provided them with policies he knew were potentially worthless and would not payout if they suffered an accident. This is not only a dishonest and deliberate failing in his responsibility as an approved person, but a complete breach of trust with his clients.”

She added: “Alexander Brincat’s incompetence at Wise Owl posed a risk to other market participants and to confidence in the financial system. In order to remove this risk Brincat has been banned. We will continue to take action against individuals who, either through incompetence or fraudulent activity, allow their firms to cause such losses to other market participants.”  

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Readers' comments (7)

  • I'm not defending these two as they obviously need to be banned but where are the banning orders and prosecution of bank directors who have done similar things.

    What about the Bank Directors that were in charge of organisations that have mis-sold PPI insurance on a wholesale business model to millions of consumers. Wasn't Bob Diamond for example, Chief Executive of Barclaycard, which is only one example I can think of straight off the bat.

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  • Anon, You are right. One rule for the big guys and another for the rest of us.

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  • Agree with above two - why is it only the banks that are allowed to rip-off their clients?

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  • I don't understand this at all!!! How can you "underinsure someone and then retain the surplus money for your own benefits"? What surplus money? Also the other case states that the company had insufficient resources to pay for "free life cover". Why do you need financial resources to apy for free life cover? Surely, its FREE!!

    I hope the FSA is as diligent at looking into the way the Banks and Building socities are mis-selling redundancy cover to the self employed who apply for a mortgage. In addition to the fact that they say its compulsory to have their Life cover and Buildings and Contents insurance if an individual wants one of their mortgages.

    However, I doubt it as everyone knows the Banks are more powerful than the FSA; so the FSA has no option other than to pick on the "little guys" it can bully easily. The Banks will just laugh in the face of the FSA and even if the FSA were to fine any of them the sum would be so small that it negilible for a major bank and no deterrent whatsoever.

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  • agree with other contributors that one rule for small firms and different for big guys. If permission is withdrawn from atleast one of the bank for major misselling than I am sure everyone would toe line and we may not even need regulator like FSA to protect consumers.One can only dream

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  • You all have it wrong. Its simple, the banks are above the law, otherwise they would have had wrath if the FSA. Its only small IFA's that the FSA run after, with their sledge hammers.

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  • There are comments on this site which seem to suggest that the FSA should not have taken any action against these 'brokers'. Sometimes you should accept that, whilst bigger fish are slipping through the net, these so called smaller fish are having a massive effect on their victims. Banks are not above the law, but may be cute as to how the laws of the land are bent or broken. Lets not be naive!!

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