CYBER SAFETY RESOURCE CENTRE

Statement: Why We Investigate Insurance Brokers — and the Risks Consumers Need to Know

At the Cyber Safety Resource Centre, we believe that every consumer deserves clarity, honesty, and full regulatory protection when purchasing insurance. Our investigations into insurance brokers and intermediary networks are driven by a simple principle: if a company is selling regulated financial products, it must meet the standards required by law — without exception.

Insurance brokers sit at the heart of the UK insurance market. They design products, market brands, collect payments, and act as the first point of contact for customers. Yet many consumers are unaware that brokers are not insurers, and that their regulatory responsibilities are very different. When a broker fails to meet those responsibilities, the risks fall not only on the firm itself, but on every partner in the distribution chain — and ultimately on the public.

Our recent investigations highlight several recurring risks:

1. Undeclared Trading Names

Some brokers operate consumer‑facing brands that are not registered with the Financial Conduct Authority (FCA). This is not a technicality — it is a breach of the rules designed to protect consumers from misleading or unregulated activity.

2. Dormant or Inactive Companies Behind Active Brands

We have identified cases where insurance brands are operated through dormant companies, while the real trading activity occurs elsewhere. This creates confusion, weakens accountability, and raises questions about governance and transparency.

3. Complex or Fragmented Corporate Structures

When a single director controls multiple companies — some active, some dormant, some dissolved — it becomes harder for consumers to understand who is responsible for what. Poorly managed structures can mask oversight failures and create regulatory blind spots.

4. Weak Oversight by Principal Firms

Appointed Representatives (ARs) may only operate under the permissions of their principal firm. When principals fail to register trading names or supervise their ARs properly, the entire distribution chain becomes exposed to regulatory risk.

5. Consumer Confusion and Misleading Disclosures

If a brand presents itself as regulated when it is not, or if disclosures are incomplete or unclear, consumers may be misled about who is responsible for their policy, their data, or their claims.

Why This Matters

These issues do not usually invalidate insurance policies — legitimate insurers remain responsible for paying claims. But they do raise serious concerns about:

• Governance

• Transparency

• Contract handling

• Regulatory compliance

• The reliability of the broker’s operations

When a broker fails to meet its obligations, it undermines trust in the entire sector.

Our Commitment

We will continue to investigate insurance brokers, AR networks, and consumer‑facing brands to ensure that:

• Trading names are properly registered

• Corporate structures are transparent

• Regulatory disclosures are accurate

• Consumers understand who they are dealing with

• Insurers are held accountable for their distribution partners

Our goal is simple: to protect the public by shining a light on the parts of the insurance market that operate without the scrutiny they deserve.

Senior Investigator 

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