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FSA bans two directors for selling unauthorised insurance contracts

The FSA has banned Stephen Fryett and Richard Baines from performing regulated activities after they knowingly sold unauthorised insurance contracts to consumers in the UK.

Fryett was a director of CIC Greece and was also involved with CIC Costa Rica, both of which were not authorised to carry out insurance business in the UK. Despite this he encouraged a number of UK insurance brokers and underwriting agents to issue insurance contracts. Limited director Richard Baines issued approximately 1800 insurance contracts underwritten by CIC Greece or CIC Costa Rica, while knowing they were not authorised.

As a result customers were not properly insured and risked substantial loss and prosecution because they did not have employers’ liability insurance.

FSA director of enforcement Margaret Cole says: “The conduct of Mr Fryett and Mr Baines displayed a serious lack of integrity and honesty and put a large number of UK businesses at serious insurance risk with the potential to also undermine consumers’ confidence in the insurance sector generally.

“Our action sends out a strong message that those who fail to check that firms can operate lawfully in the UK and who encourage firms to conduct financial services without authorisation will be prohibited from working in the UK financial services sector.”

Fryett referred the FSA decision to the Financial Services and Markets Tribunal, which upheld the regulator’s ban on the basis that he poses “a serious risk to consumers and to confidence in the financial system”.


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