More money than broker Savesure was entitled to receive as commission was used to fund business expenses
The FCA has banned insurance broker Ralph Whittington for deliberating causing his firm Savesure to misappropriate insurance premiums.
As a result Whittington has been fined £42,111. The FCA has also withdrawn his approval to perform any controlled function at Savesure in which he was one of the shareholders.
Whittington agreed to settle at an early stage of the FCA’s investigation which meant that he qualified for a 30% discount.
In January 2014 Whittington informed the FCA that Savesure had stopped trading and in July 2014 Savesure entered voluntary liquidation.
Between March 2012 and December 2013, the FCA said that he had deliberately caused Savesure to misappropriate insurance premiums paid to Savesure by its clients for insurance.
More money than Savesure was entitled to receive as commission was transferred from Savesure’s client premium bank account to its business account.
Savesure had received £208,612 of client premiums and the broker earned £43,716 in commission.
But then he transferred an extra £50,899 from the client account to the business account.
The misappropriated insurance premiums were primarily used to fund Savesure’s business expenses.
Some of the money was also used to repay funds Whittington had paid into Savesure from his personal finances or from funds raised through creditors.
The FCA said: “Mr Whittington knew that Savesure was not entitled to all of the money being transferred and nevertheless made the transfers as required to pay Savesure’s expenses.
“The FCA found that Mr Whittington failed to act with honesty and integrity by knowingly causing Savesure to misappropriate insurance premiums paid to Savesure by its clients.”
On entering liquidation, Savesure owed £63,107 to insurers and underwriters in relation to outstanding insurance premiums for policies arranged.
All of those insurance policies had been arranged by Savesure under risk transfer agreements.
Additionally, on 29 July 2014, Savesure’s client base and insurance book were sold to another broker.