FSA bans unfit financial firms

More than 600 companies barred from industry

More than 600 mortgage and general insurance firms have been barred from operating since legislation brought them under the watch of the Financial Services Authority (FSA) in 2004.

A lack of appropriate systems and controls is cited by the regulator as one of the reasons for organisations being considered unfit to conduct their business.

‘It is essential that unfit firms are kept out, to ensure that there is a level playing field for the benefit of intermediaries,’ said Andrew Honey, head of insurance in the FSA’s small firms division.

Mortgage provision became a regulated industry in October 2004, followed by the general insurance industry in January, with firms in both sectors having to submit regular electronic reports to the FSA.

At the time, experts warned that IT compliance costs could exceed £200m across the industry as firms deploy the necessary systems (Computing, 5 November 2004).