600 rogue mortgage and GI firms banned since M-Day

The Financial Services Authority has revealed it has kept out more than 600 rogue mortgage and general insurance firms out of the industry since the start of regulation.

M&GI firms must apply for authorisation in order to be regulated and conduct business legally.

FSA records show that, at the first stage of the authorisation process, approximately 550 M&GI firms either withdrew or were refused permission to conduct business.

At the second stage of the process where firms can appeal to the Regulatory Decisions Committee, approximately 60 firms withdrew or were refused. The
tribunal is the third and final part of the process, and 11 firms have withdrawn or been refused.

Andrew Honey, head of insurance in the small firms division of the FSA, says: “One year on from mortgage regulation, and nearing the anniversary of GI regulation, this is good news for the industry.

“It is essential that unfit firms are kept out to ensure there is a level playing field for the benefit of intermediaries. It also provides crucial protection for consumers. In order to achieve this, the FSA has a robust authorisations process and is willing to defend its decisions.”

Authorised firms need to fulfil the FSA’s threshold conditions and be fit and proper to conduct regulated business. Firms are refused for failing to disclose information which includes previous convictions, issues with previous regulatory bodies, and a lack of appropriate management or systems and controls.