UK General suspends AR activity over mis-selling allegations

The regulator has ordered UK General to have a third party conduct a "skilled person" report into the allegations. 

In the meantime, the company has stopped its ARs from selling, a source told Post.

A spokesperson for UK General told Post: "UK General never comments on regulatory speculation of this nature."

The news follows a thematic review by the FCA into the "serious and widespread mis-selling" of insurance policies by appointed representatives in July.

The FCA went on to issue two section 166 orders to at-fault firms. However, in response to a freedom of information act submitted by Post, the regulator declined to say to which companies on the grounds that it may "prejudice the commercial interests of the firms". 

The FCA told Post it would not comment on the actions of individual firms and neither denied nor confirmed whether UK General had been served a section 166.

The source said that Deloitte is consulting the company "to help review poor processes, lack of audit and controls" with respect to AR conduct. Deloitte refused to comment.

In an interview concerning the initial FCA review, Mark McIlquham, insurance partner at Deloitte, told Post last month: "Some distributors of insurance policies may have believed that being an AR was a lighter touch than being directly regulated. This pronouncement shows once and for all that this is not the case."

A senior source at an appointed representative of UK General told Post: "I'm aware that there's a great deal of noise around them telling their AR's to stop selling. It have told us to stop selling certain lines."

Despite the mis-selling, the business is still in discussions with Fenchurch Advisory Partners to find bidders to buy the company from Primary Group, the source said.

Last year Primary appointed Fenchurch Advisory Services to look into selling UK General, with sources telling Post in July that private equity house JC Flowers were among the frontrunners for the firm, understood to be valued at around £100m.

Compliance consultants have seen a three-fold increase in the number of brokers contacting them since the review, Post revealed last week.