The FSA has banned two insurance agents after it was found that they had issued hundreds of policies purportedly underwritten by companies which were not authorised to carry out insurance business in the UK.
Stephen Fryett and Richard Baines are prohibited from carrying out any role in relation to regulated financial services. The two were linked with CIC Greece and CIC Costa Rica, neither of which was authorised to carry out insurance business in the UK, or in Greece or Costa Rica. CIC Greece was not, in fact, a registered company in any jurisdiction. More than 1800 policies, mostly employer's liability, were issued to shops, food outlets and small businesses in the UK. Those policyholders consequently did not have proper insurance and risked substantial loss and possibly prosecution as a result of taking out compulsory employer's liability insurance with an unauthorised (or non existent) insurer.
Mr Fryett claimed he was a director of CIC Greece and was also involved with CIC Costa Rica. Mr Baines ran an insurance broker, Insureyourshop.com Limited, which issued the policies that were purportedly underwritten by CIC Greece and CIC Costa Rica. The FSA said that the men's behaviour lacked integrity and honesty. Most importantly, said Margaret Cole, Director of Enforcement, the bans "send 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."
The FSA was alerted to the situation in 2004. Since then it has returned nearly £650,000 to policyholders who bought insurance from CIC.