Car Insurance Broker Hit by FSA Fine

An insurance broker which cancelled around 4,500 car cover deals after they were sold at excessively low prices has been censured by the regulator.

Hastings Insurance Services must now pay a fine of £735,000 to the Financial Services Authority (FSA), following an investigation. The cancellations occurred last summer, and were enforced after the firm discovered that it had inadvertently charged too little for the car insurance.

It was the summary nature of the cut-offs, and the unwillingness of Hastings to consider alternative solutions, which occasioned the fine according to the watchdog. For example, the firm was found to have neglected to pay the premiums' shortfalls to the providers of the insurance after cancelling.

FSA director of enforcement, Margaret Cole, added: "It is clear from our investigation that Hastings put its own interests ahead of those of its customers.

"The firm failed to consider properly what effect cancelling policies might have on its customers which illustrates that the fair treatment of customers had not been embedded into its corporate culture as our [guidelines] clearly require."

According to the FSA, Hastings' fine could also have risen above £1 million, had the firm decided not to settle at an early stage.