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Mark Steward & FCA's definition of a 'Legitimate Insurer'

At the APM (Annual Public Meeting) of The FCA this week, Mark Steward, Head of FCA Enforcement made this statement [among others]:

"Part of the proposition to consumers was involved something called a capital protection scheme. So this is the the insurance aspect of that in question raises. the capital protection scheme offered amounts of up to 75,000 pounds for losses arising from the investment. The insurer is a legitimate insurer. We understand that claims have been made on behalf of blackmore bonds against that insurance policy….”

It is a quite astonishing representation in light of substantial evidence to the contrary that much, if not all, of which must be know to The FCA and Mr Steward.

I have this week submitted this Freedom Of Information Request to The FCA seeking information that will answer my questions and address the numerous issues this representation reveals.

NEW Blackmore Bond FOI REQUEST 3 [of several]

To the FCA data team,

(TSC [Treasury Select Committee] and Transparency Taskforce copied) Further to representations made by Mark Steward yesterday at the FCA APM in respect to ‘Blackmore Bond’ please find below the first of several FOI requests in respect to those Blackmore Bond representations. BLACKMORE BOND FOI REQUEST 3 - I refer you to my earlier BLACKMORE BOND FOI REQUEST 2 and the following statement by Mr Steward featured in it: MARK STEWARD 2022 FCA APM - RE: BLACKMORE BOND: "Part of the proposition to consumers was involved something called a capital protection scheme. So this is the the insurance aspect of that in question raises. the capital protection scheme offered amounts of up to 75,000 pounds for losses arising from the investment. The insurer is a legitimate insurer. We understand that claims have been made on behalf of blackmore bonds against that insurance policy….” Mr Steward made the statement “The Insurer is a legitimate insurer”. The evidence that I have rather demonstrates that this is not the case, and the evidence also suggests that The FCA are well aware of this. One of the two Costa Rican based insurers that provided the Investment Insurance Product [called the ‘Capital Guarantee Scheme] is ION Insurance.

TO BE CLEAR, Mr Steward refers to them as ‘A legitimate Insurer’. WHEREAS, I refer the FCA and the Treasury Select Committee to the attached document ‘Dubious Reinsurers’, within which there is substantial evidence to the contrary. This was presented to me by an insurance professional and the entirety of its contents are disturbing to say the least, but also further disturbing in the sense that the FCA MUST be aware of all that is within these pages, and it even references actions taken by the then FSA, so far back does this nonsense go. Indeed, of the many disturbing references within this attached document I refer you to the content specific to Mr Robert Harrison. 1. On page 10 of ION’s 2019 Annual Report you will see that it confirms ION’s Director of Underwriting is Robert Harrison.

2. Robert Harrison was the former owner of an Insurance firm by the name of ’Northern & Western Insurance Company’. I refer you to this article from the Mirror dated 23rd May 2019 2.1. I also refer you to this article in the Guardian dated 11th March 2018 3. As you can see the article features the collapses of many other UK Property Investments [scams], including the collapse of Key Homes Group in 2014. 4. Investors in ‘Key Homes Group Limited’ were also duped by claims that there was an ‘Investment Insurance Product’ in place to guarantee their investments. See the Mirror article for more details, but I include the insurance specific points here: “Investors in a property scheme thought they were in safe hands because they were being advised by a law firm and protected by an insurance policy[...] But 882 people were stung for almost £53million when Key Homes Group collapsed. [...] An insurance company that supposedly protected deposits also collapsed and failed to honour the policies. Called Northern & Western Insurance Company, it should have set off more alarm bells. It was run from Texas by Robert Harrison and his wife Devon Harrison. Mr Harrison had been banned from the insurance business in the state for “fraudulent and dishonest practices”. He had "wholly misappropriated" premiums paid by customers, leaving them without cover. It was not regulated by the then Financial Services Authority.” 5. Mr Harrison has not only been banned from the insurance business in the U.S. for fraudulent and dishonest practises’ and having "wholly misappropriated premiums", you can see in the attached document the litany of other cases in which he has been involved and the multitude of judgements against him. 6. Indeed, in the UK Key Homes Group scheme, he and his firm were accepting premiums for £53million in Investment Insurance, but at no time had more than £78,000 in capital. 7. HOWEVER, the 2015 collapse of his Northern & Western Insuance Company, and the findings against him in respect to it was not Robert Harrison’s first foray into Insurance wrongdoing, as this Blog article exposes "In fact Robert Harrison had lost his licence years back, when the Insurance Department in 2002 determined that:- During the course and scope of operating an insurance business, Robert S Harrison collected and received substantial sums of money (insurance premiums) from insurance customers and thereafter failed to secure the contracted for coverage; failed to forward them to the proper insurance carrier, and wholly misappropriated and converted the sums to his own use." 8. However, ION do not only employ the dubious Mr Harrison in a senior role, they also employ one David William King. ION’s website includes this bio for him: "Responsible for administration duties and compliance issues. David has over forty five years insurance and reinsurance experience in the London and International markets, with a special emphasis on office administration. During his years in the industry he has managed offices for a number of Lloyd's Broking houses and spent time on a Lloyd's syndicate to gain experience of Underwriting management. David is also currently a consultant with Pacindat Consultants Ltd, a Cyprus Company that works closely with ION on a consultancy basis." 8.1. This is the same David William King who is the subject of this FSA Final Notice dated 4th June 2007 [Yes, the same FSA that is now known as The FCA] A damning notice in its entirety but that particularly includes the following:

"By contrast policyholders who were issued with policies which were effected or purported to have been effected with CIC Costa Rica or CIC Greece were exposed to the very serious risk that legitimate claims under such policies would not be met either because there was no cover in place at all (as was the case as regards CIC Greece) or because the insurer did not have liquid assets with which to pay claims (as was the case as regards CIC Costa Rica).
1.8 Mr King’s conduct poses a serious risk to consumers and to the financial system in general. His conduct was below the standards of competence and capability and honesty, integrity and reputation required of a participant in the insurance industry. 1.13 Mr King’s reputation is below the level required of a participant in the insurance industry. He has failed to meet the standards of competence and capability and honesty, integrity and reputation required of a participant.
1.14 In the circumstances Mr King is not a fit and proper person to
(a) carry out any controlled function involving the exercise of significant influence (as defined in the FSA's Supervision Handbook at 10.5.1G) over any person; and (b ) perform any function involving the exercise of management authority over any person including, but not limited to, being a controller (as defined in section 422 of the Act) in relation to any regulated activity carried out by any authorised person, exempt person or exempt professional firm. Accordingly, the FSA proposes to make a prohibition order against Mr King in those terms.

8.2. None of that features in Mr King’s bio on the ION website.

FOI ELEMENT A - Mr Steward’s representations yesterday to the public and media, and intended for the Blackmore Bond victims also, seeks to establish ION as a ‘Legitimate Insurer’. Yet the evidence I have, some of which is attached and included within the body of this email, demonstrates that Mr Steward and the FCA must know this to be untrue, or to certainly stretch credibility beyond that which is reasonable. Please explain why Mr Steward and the FCA would make such knowingly misleading representations to the public, media and Blackmore Bond victims yesterday? FOI ELEMENT B - Mr Steward and The FCA, like me, have seen the various Investment Insurance product documents. They include two key exemptions: a) The insurance will not payout if there is evidence of fraud by Directors and b) The insurance will not payout if the investment portoflio is not properly diversified This essentially covers the majority of reasons why such ‘Investments’ fail, and so was highly unlikely to payout under any circumstances.

Indeed, Blackmore Bond falls foul of not one but both of those. Since the broadcast of the Panorama programme, I have been inundated with contacts from other investment scam victims where ‘Investment Insurance’ such as this was used to dupe investors, none of which paid out. Can the FCA explain why it is going to extraordinary lengths to give this insurance company and its product credibility and legitimacy, when it knows this is not the case?

FOI ELEMENT C - I have included representations made by Mr Steward yesterday, but what he failed to say is as disturbing as what he did say. Mr Steward failed to mention that these Investment Insurance products were sold via UK based and FCA Regulated Insurance Brokers. Why? Was this with intent to further the false narratives that the FCA has been peddling since the collapse of Blackmore Bond, to the effect that everything pursuant to it was beyond The FCA perimeter, authority and powers? For the record, the sale of this bogus ‘Investment Insurance’ from Costa Rican insurers that was never going to payout, was brokered by UK based and FCA Regulated Insurance brokers. An insurance expert advises me that such FCA regulated insurance brokers have a responsibility to ensure that the insurance product being brokered and sold is ‘appropriate’. WHEREAS it is clearly established that: a) The Investment Insurance Product could not be, or was not, sourced from an insurer located in the EU or UK, that would have made any claim against it far easier and within the jurisdiction of English law and English courts as opposed to the current scenario where Costa Rican Courts have jurisdiction, and are clearly less likely to uphold any action. b) The wording of the document and the exemptions within it mean that it was highly likely, or inevitably, never going to payout under any circumstances, or certainly the most likely of circumstances and reasons for which such an Investment would have failed and resulted in losses. It is unequivocal therefore that this was not an ‘appropriate’ product sold by these FCA Regulated Insurance brokers, and for which I understand they were paid substantial commissions. Can the FCA explain why they have failed to act against these FCA regulated insurance brokers and have not sought compensation for victims from the indemnity or public liability insurance of these FCA regulated brokers, and why it has sought to conceal all mention of their involvement and apparently failed to take any enforcement action? FOI ELEMENT D - I refer you again to the Sunday Times interview with Mark Steward by Ali Hussain, whereby Mr Steward was emphatic in his position that 'There Is no such thing as a risk free investment’ and ask you to explain why yesterday the same Mr Steward on behalf of the FCA and with apparent full approval of Mr Rathi, who was present and made no effort to correct or challenge Mr Steward, sought to give credibility to this investment company and their investment product insurance, essentially arguing that Blackmore Bond was a ‘Risk Free Investment’? I look forward to your response and refer you to statements made yesterday as to responses to FOIA’s no longer being subject to delays. Regards Paul Carlier

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