UK regulatory body the Financial Services Authority (FSA) has completed its nationwide investigation into unauthorized general insurance businesses.
The FSA visited more than 1,700 firms that were potentially conducting illegal insurance activities, including primary intermediaries (brokers who sell insurance as their main business) and secondary intermediaries (firms who sell insurance as a secondary activity to their main business).
The watchdog said that it found only two primary intermediaries and 14 secondary intermediaries that were willfully acting illegally. The FSA said that where breaches were inadvertent or resulted from genuine misunderstanding it had worked with the firms to ensure they stopped acting illegally, either by helping them become compliant or by restructuring their business so that they did not need to be authorized. Businesses who were willfully acting illegally were shut down.
Clive Briault, FSA managing director for retail markets, said: Policing the perimeter is a vital part of our work to protect consumers who do not have the safeguards of regulation, or access to statutory redress and compensation, if they deal with unauthorised firms. We have been impressed with the level of understanding of the new rules in both the primary and secondary insurance markets, with most firms aware of the need to be authorised if they undertake regulated activities.