The Financial Services Authority (FSA) has banned insurance broker Harbinder Panesar from working in financial services and fined him £212,237.
An investigation by the FSA revealed that between August 2008 and December 2010 Panesar misappropriated over £180,000 from motor breakdown insurance firm Elite, where he was director, and another insurance broker he previously ran called Motorcare Warranties.
Panesar was the director of South Wales Motorcare Elite. The FSA has cancelled the permission of Elite, meaning it can no longer conduct authorised business. Elite is currently in liquidation.
The regulator said the £212,237 fine took into account Panesar’s ‘reckless operation of Elite’ which allowed him to:
- sell his product, ‘Supreme Plus’, which fundamentally failed to meet customers’ needs;
- sell policies that were outside the scope of cover offered by its underwriters;
- fail to report policies accurately to its underwriters; and
- sell policies after Elite’s deal with an underwriter had ended.
These failings meant that over 6,000 customers were left without the motor breakdown insurance cover they had paid for.
The regulator said Panesar had recently been discharged from bankruptcy, indicating that paying the full financial penalty would cause him serious financial hardship. However, it said his misconduct was so serious that it would not be reducing the penalty and would be prepared to put Panesar into bankruptcy a second time should he be unable to pay.
Tracey McDermott (pictured), FSA director of enforcement and financial crime, 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.’