The FSA has stripped Walsall Bridge Insurance Consultants of its permission to carry on regulated activities after it found the firm had failed to pass on received client premiums to insurers.
The insurance broker’s action left clients uninsured, before the firm used the money to run the day-to-day activities of its business.
The FSA has also banned the company’s sole director, Geoffrey Thomas Robbins, from conducting any further regulated business after finding him not fit and proper to work in the general insurance industry.
Since March 2005, the regulator has said that due to financial difficulties Walsall had failed to arrange insurance policies and to pass over the premiums of its clients to the insurers and intermediaries.
This resulted in 19 clients being left without insurance and one client incurring losses which were uninsured. In addition Walsall had charged at least 6 clients inflated premiums for insurance. As a result premiums owed by Walsall to insurers currently exceed £140,000.
Director Geoffrey Thomas Robbins also admitted to providing clients with misleading information about their policies and falsely obtaining loans to meet the cost of insurance premiums but failing to use it for this purpose.
FSA director of enforcement Margaret Cole says: “The FSA will not tolerate insurance brokers who put customers at risk by failing to ensure their clients have appropriate cover. To take client premiums and then fail to arrange insurance is not acceptable practice. We will take enforcement action to stop any behaviour that leads to consumer detriment.”