The FSA has imposed one of its largest-ever fines on an individual for insurance fraud as part of a wider crackdown which has seen five people banned in total.
Andrew Jeffery, director of Jeffery Flanders Consulting, has been banned and fined £150,000 for "recklessly" failing to put in place insurance policies appropriately.
The FSA says Jeffery exposed often elderly and vulnerable customers to the risks associated with not having adequate household or motor insurance.
He is one of five individuals banned by the regulator for failings in relation to insurance fraud, including one "incompetent" husband, wife and sister-in-law team who used client money obtained through one company to set up another.
Barrie Duncan Aspden, of Orion Direct, knowingly used about £300,000 of his customers' cash to finance the creation of online insurance site Peppercom.
Despite being declared bankrupt and unable to obtain approved person status, Aspden employed his wife, Melanie, and sister-in-law, Gaenor Clayton, as directors, as well as family friend Paul Willment.
The quartet all failed to demonstrate competence and capability and ensure client funds were used solely for the purposes they were provided for. Willment was fined £50,000 for his role.
Margaret Cole, director of enforcement and financial crime at the FSA, says: "These five individuals acted with complete disregard for the interests of their customers and the FSA's regulatory requirements.
"Individuals holding a significant influence function role such as that of director must act with integrity as well as with the skill, care and diligence necessary to manage effectively the businesses for which they are responsible.
"The FSA does not tolerate these types of failings. We will continue to take action against those who commit insurance fraud, as well as those who fail to take action to prevent it."
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