Chapel Finance Limited director Alan Dennis Garlick failed to ensure that guaranteed asset protection policies and payment protection policies, sold from January-April 2005 were underwritten.
Chapel, which went into administration in February 2006, also held client money which it was not authorised to do and did not comply with the FSA’s client money rules as a result.
FSA head of retail enforcement Jonathan Phelan says: “Insurance brokers must make sure that policies are underwritten at all times. Having systems and controls in place is essential to ensure compliance with our rules and it is a management responsibility. Mr Garlick, as director of Chapel, should have overseen the implementation and maintenance of adequate systems.
“Firms should not hold client money without our authorisation to do so. There is no excuse for firms that fail to protect client money as we have provided tools to help them. Any failures we identify will be viewed seriously and we will take the appropriate action, which includes prohibition from the industry as shown in this case.”