FSA uses enforcement powers in broker case

The recent regulatory action taken against a London based broker was a key test of the Financial Services Authority’s general insurance regime, just over one year since it began. In this article, Chris Warren-Smith and Laura Cooke of law firm Barlow Lyde & Gilbert explain the circumstances of Xsavi’s downfall, and the messages that the FSA’s actions hold for others in the market.

The recent cancellation of permission by the Financial Services Authority (FSA) of Xsavi Limited, a London based broker, is the first enforcement action against a general insurance intermediary for business conduct failings since the FSA took over regulation of the sector in January 2005. In addition to its “watershed” status, the case is of wider interest as it provides an insight in to the FSA’s attitude to the supervision and practices of general insurance brokers.