The FCA’s sanctions on ‘reckless’ insurance broker Andrew Jeffery have been affirmed

Banned sign

The Financial Conduct Authority’s decision to ban and fine Jeffery Flanders (Consulting) director Andrew Jeffery was upheld yesterday by the Upper Tribunal. The FCA fined Jeffery £150,000 – one of the largest financial penalties imposed on a broker for insurance fraud.

The tribunal found that Jeffery had retained clients’ premiums without passing these on to the underwriter. This meant that some clients did not receive the household and motor cover they had paid for and others were exposed to that risk. The tribunal said that Jeffery “had a reckless disregard for the interests of his clients, which came a very poor second to his own”.

Jeffery also arranged for letters, purporting from his clients, to be sent to insurance companies to deceive them. His actions meant underwriters dealing with Jeffery Flanders were contractually obliged to meet claims, even though they had never received the premium from Jeffery.

The tribunal said: “Mr Jeffery displayed an unacceptable lack of integrity in his dealings with the clients whose cases we have considered, and with other professionals in the insurance market. Far from demonstrating a high standard of conduct, his conduct was of the basest standard.”

The tribunal also described how Jeffery sought to evade the FCA’s requirements for information, saying of his responses: “It would be difficult to find more stark an example of disingenuousness and obstruction.”

The tribunal gave its decision on 27 June, after a 16-day hearing in December 2012 and January 2013. Jeffrey can appeal.

Jeffery Flanders has not been authorised by the FCA since having its permission cancelled on 20 January 2010.