Mr Fryett acted as a Director of CIC Greece and was also involved with CIC Costa Rica, both of which were not authorised to carry out insurance business in the UK. Despite knowing this he encouraged a number of UK insurance brokers and underwriting agents to issue insurance contracts. Insureyourshop.com Limited, run by Richard Baines, was one of those UK insurance brokers and it issued approximately 1800 insurance contracts, including employer's liability insurance, purportedly underwritten by CIC Greece or CIC Costa Rica.
As a result the customers, including construction firms and fast food outlets such as Chinese, kebab and pizza takeaways and fish and chip shops, were not properly insured and risked substantial loss and, even prosecution because they did not have employers' liability insurance.
Mr Baines was the Director of Insureyourshop.com Limited and also issued CIC policies to UK businesses while knowing that CIC Greece and CIC Costa Rica were not authorised.
FSA Director of Enforcement Margaret Cole said: "The conduct of Mr Fryett and Mr Baines displayed a serious lack of integrity and honesty and put a large number of UK businesses at serious insurance risk with the potential to also undermine consumers' confidence in the insurance sector generally. Our action sends out a strong message that those who fail to check that firms can operate lawfully in the UK and who encourage firms to conduct financial services without authorisation will be prohibited from working in the UK financial services sector."
Mr Fryett referred the FSA prohibition decision on him to the Financial Services and Markets Tribunal.
The Tribunal has upheld the FSA decision saying: "Our conclusion is that on the basis of his conduct Mr Fryett does pose a serious risk to consumers and to confidence in the financial system. He has been involved in breaches of the General Prohibition. He has failed to act in accordance with the standards of honesty and integrity which were reasonably to be expected of someone in his position and he has failed to act in accordance with the standards of competence and capability that were reasonably expected of him."
The "general prohibition" set out in Section 19 of the Financial Services and Markets Act 2000 is that no person may carry out a regulated activity in the United Kingdom unless he is authorised or lawfully exempt.
