The FSA has banned and fined an insurance broker £212,000 for misappropriating money from his business and selling worthless policies to over 6,000 customers.
An FSA investigation into motor insurance firm Motorcare Elite director Harbinder Panesar revealed that between August 2008 and December 2010 he misappropriated over £180,000 from Elite and another insurance brokerage he ran, Motorcare Warranties.
South Wales-based Panesar sold a product called Supreme Plus which fundamentally failed to meet customers’ needs and was outside the scope of cover offered by its underwriters.
He also failed to report policies accurately to underwriters and sold policies after his firm’s deal with the underwriter had ended.
Despite having recently been discharged from bankruptcy, the regulator refused to reduce the fine because of the seriousness of his misconduct and says it is prepared to put Panesar into bankruptcy again if he is unable to pay.
FSA director of enforcement Tracey McDermott says: “So egregious were his actions that even though he has only recently been discharged from bankruptcy, we will not reduce the fine because of financial hardship.
“Such dishonesty and recklessness not only posed a risk to consumers, but also to other market participants and to confidence in the financial system as a whole. Panesar is learning the hard way that we will not stand for this kind of activity.”