FSA closes fraudulent Manchester-based broker

by Gill Montia

Story link: FSA closes fraudulent Manchester-based broker

The Financial Services Authority (FSA) has closed a Manchester-based insurance broker that has been selling insurance without underwriting in place, thus leaving clients uninsured.

M Young Legal Associates (MYLA) advised on and sold “after-the-event legal expenses insurance”, issuing policies in the names of NIG, IGI Insurance and Contractors Bonding, despite having no underwriting agreement in place.

The FSA investigation, which centred on events between July 2003 to March 2004 and September 2004 to November 2005, also found that MYLA failed to pass on premiums to underwriters when it did have an underwriting agreement.

The firm also charged clients interest on credit agreements for premiums that were never paid.

Jonathan Phelan, Head of Retail Enforcement at the FSA describes MYLA as having “exposed its customers to significant risks and potential hardship” and added that the FSA’s action “is one of the toughest sanctions we can take and reflects the seriousness of the behaviour”.

MYLA is based at 60 Fountain Street, Manchester and is also operating at 290 Manchester Street, Oldham.

Both the firm’s managing director and finance director have been banned from operating in the financial services sector.