High Court found the three insurance professionals conspired to defraud Markel, QBE and Amalfi

The FSA has banned from working in financial services three insurance professionals, who were found guilty of a £2m fraud.

The authority announced last week that it had banned Timothy Higgins, Clifford Felstead and Ralph Brunswick, who found by the High Court to have conspired to defraud Markel and QBE/Amalfi Underwriting in June 2008.

The FSA said it would also have fined Higgins £600,000 if he had not recently been made bankrupt.

Higgins and Felstead were both employed by Surety Guarantee Consultants (SGC), which issued surety bonds, holding binding authorities with Markel and QBE via its agent Amalfi.

SGC wrote business that exceeded its authorised limits, exposing Markel and QBE to greater liabilities than they had agreed.

In doing so, SGC made secret profits and withheld over £2m that should have been paid to the insurers, siphoning the money to a British Virgin Islands registered company owned by the three men.

When SGC was audited by the insurers, it produced false documents designed to show that it had kept within the terms of the binding authorities, aided by Brunswick who provided false documents in the name of his employer, a company located in the Isle of Man.

SGC also lied to QBE about Felstead’s previous conviction for fraud and continued to involved him in its surety bond business after the FSA told the company not to employ him.

FSA director of enforcement and financial crime, Margaret Cole, said: “The London market relies on the trust and integrity of those who work in it. This sort of premeditated dishonesty will not be tolerated in the insurance industry or anywhere else in financial services. We will continue to take strong action against anybody else tempted to act in this way.”

Brunswick was also disqualified as a director for 13 years and six months by the Isle of Man regulator in March 2009. SGC ceased trading in January 2007.

Markel’s president and chief operating officer, William Stovin, said: “We welcome the FSA’s robust approach. The market depends on trust and when we find our trust abused we’ll do all we can to work with the FSA and help make sure the culprits are punished. We take the abuse of delegated authority extremely seriously. As soon as we and QBE became aware of the situation, we brought it to the attention of the FSA.”