The Financial Services Authority (FSA) yesterday banned two insurance brokers from working in the financial services industry after they were found guilty of misconduct.
Andrew Porter and Alexander Brincat are no longer eligible to work in the industry after the FSA carried out investigations which uncovered a number of failings, including a failure to monitor the financial position of Brincat’s insurance firm Wise Owl Services Limited, which has also had its permissions withdrawn.
Brincat was the sole director and a shareholder of small firm Wise Owl, which specialises in insurance policies for buildings and life insurance.
According to the FSA, between September 2009 and August 2010 Brincat failed to monitor adequately the high cancellation rate of life insurance policies sold by Wise Owl.
He was also found to have failed to disclose to Wise Owl’s insurance providers that it had a sales strategy of offering free life cover to customers and left the country for prolonged periods without putting in place adequate compliance arrangements at Wise Owl.
In addition, Brincat did not ensure that Wise Owl had sufficient resources to pay premiums due to customers who had agreed to the free life cover offered by Wise Owl, and repay sums of commission claw back owed to insurance providers when such cover was cancelled. He also failed to monitor Wise Owl’s financial position, including the extent of Wise Owl’s liabilities to insurance providers.
Acting director of enforcement and financial crime, Tracey McDermott, said: “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.”
As a result of his actions Brincat has been banned from performing any function in relation to any regulated activity.
Porter was the sole shareholder and the only broker at Porter Insurance, which specialised in providing insurance policies for individuals and businesses. The FSA found that he had deliberately underinsured clients and kept the surplus money for his benefit.
He was also deemed to have exposed companies to significant financial risk, by misleading them into paying for cover which was inappropriate for their business needs and therefore left them underinsured.
Porter was also exposed as having falsified documentation in the names of companies to mislead those clients and recipient insurance companies.
Tracey McDermott said: ''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.''
The FSA said that it considered Porter’s dishonest conduct to be serious because he abused the trust and confidence his clients and recipient insurance companies placed upon him, exposing the clients to significant financial losses.
Posted in: 
0 comments:
Post a Comment