FSA bans and fines broker selling worthless policies

The FSA has banned insurance broker Harbinder Panesar from working in the financial services industry and fined him £212,237.

An FSA investigation revealed that between August 2008 and December 2010 Panesar misappropriated more than £180,000 from Elite and another insurance broker he previously ran, Motorcare Warranties.

The FSA has cancelled the permission of Elite, meaning it can no longer do authorised business, and the firm is currently in liquidation.

In addition, Panesar sold a range of useless policies that failed to meet customers’ needs, by being outside the scope of cover offered by underwriters, recorded inaccurate details, or were sold after Elite’s deal with an underwriter had ended.

More than 6,000 customers were left without the motor breakdown insurance cover for which they had paid.

The FSA said that Panesar’s misconduct is so serious that although paying the full financial penalty would cause him serious financial hardship, they will not be reducing the penalty.

FSA director of enforcement and financial crime Tracey McDermott said:“Harbinder Panesar has left a trail of destruction behind him: misappropriating funds from his businesses, acting recklessly towards consumers, and taking two firms into liquidation.

“So egregious were his actions that even though he has only recently been discharged from bankruptcy, we will not reduce the fine because of financial hardship.  Such dishonesty and recklessness not only posed a risk to consumers, but also to other market participants and to confidence in the financial system as a whole. Panesar is learning the hard way that we will not stand for this kind of activity.”