Delay in publicising fears over failing broker provided time to seek rescue, regulator says
The FSA reacted angrily this week to criticisms that it did not tell the market quickly enough of its concerns over broker BPS Insure.
On 28 April the regulator identified a deficiency in BPS's client money account during a thematic visit to the company. BPS was prohibited from accepting new business on the following day.
But the FSA did not notify the market until the broker was put into administration on 27 May, leaving BPS's existing suppliers to rack up further credit for another month.
A spokesman at the FSA said: "The main priority of the regulator is to try to ensure the survival of a company facing difficulties. There is often the possibility that a firm can be rescued and any premature announcement could jeopardise the company and consumers.
"These criticisms are not fair or right. We acted very quickly in protecting consumers by stopping the company taking on new business, but it takes time to discover a problem and properly evaluate whether it's fatal."
Towergate catches the travelling showme
Towergate has inherited a "profitable" scheme for travelling showmen from failed broker BPS Insure.
The consolidator bought the renewal rights to all of BPS's commercial and personal lines books, worth £20m GWP, after the company went into administration on 27 May.
Tim Johnson, chief executive of Towergate, commented: "It may seem an unusual scheme, but the travelling showman cover is actually a very profitable piece of business."
Towergate will maintain BPS's 11-branch network pending a review of the broker's operation.
It has secured the ongoing employment of 86 BPS staff.