An Insolvency service investigation found that from 31 March 2013 until November 2013, David Stuart Picton caused My Cover Ltd to mis-sell over 11,000 contracts for insurance to customers.
Until 31 May 2013, My Cover was an authorised representative of a principal, after which it instructed My Cover to write no further new business on its behalf. At around the same time, the underwriter withdrew its underwriting facility from My Cover. No alternative underwriter was ever appointed on either a prospective or retrospective basis.
Following the withdrawal of underwriting, My Cover sold at least 11,162 policies (a combination of new and repeat business) that were not insured by an underwriter, in breach of FCA requirements. My Cover continued to represent to policyholders that the policies were in fact underwritten by an insurer.
My Cover’s income from its business book during that period totalled at least £986,775. At the date of Liquidation, My Cover had assets of £12,500 and estimated liabilities of £1,515,662.
Cheryl Lambert, Chief Investigator at the Insolvency Service, said:
"Directors who breach regulations and cause the public to lose money can expect to be investigated by the Insolvency Service and enforcement action taken to remove them from the market place.
"Mr Picton caused My Cover to mis-sell 11,162 insurance policies to members of the public who were told that an underwriter was in place. These people have lost a total of £987k. Taking action against Mr Picton is a warning to directors to take their duties seriously and to protect their customer’s interests."
