FSA bans Lancashire broker for failing to insure consumers
Jonathan Phelan
We will take enforcement action to stop any behaviour that leads to consumer detriment. 
FSA/PN/124/2008
23 October 2008
The Financial Services Authority (FSA) has banned Lancashire broker Neil McKay after finding that he cancelled contracts of insurance without customers' knowledge or approval and failed to pass premium payments taken from customers on to other intermediaries or insurers as required.
The FSA also found that Mr McKay of Ideal Insurance Services Ltd (Ideal), Chorley failed to disclose in his application to be an approved person that he had been convicted in 1996 of eight counts of obtaining property by deception and sentenced to eight months imprisonment.
Jonathan Phelan, head of retail enforcement at the FSA, said:
"The FSA will not tolerate insurance brokers who put customers at risk by failing to ensure their clients have appropriate cover. Taking client premiums and then failing to arrange insurance, and cancelling contracts of insurance without customers' knowledge or approval are unacceptable practices as is lack of frankness about a person’s past history when applying for FSA approval. We will take enforcement action to stop any behaviour that leads to consumer detriment."
The failings at Ideal were identified during a visit by the FSA in April 2008 after which the firm’s permission was suspended. Mr McKay has been banned from any financial services functions as he is not a fit and proper person in terms of his honesty and integrity. The FSA has also cancelled Ideal’s permission with effect from today.
Notes for editors
- The Final Notices for Mr McKay and for Ideal Insurance Services Ltd can be found on the FSA website.
- Ideal became authorised on 14 January 2005 to carry out regulated insurance activities. It mainly provided liability and other insurance cover to hotels, pubs and other commercial enterprises.
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
- The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.