FINAL NOTICE

Paul Catterall
t/a Deal Direct Insurance Bureau
6 Thorn Well
Westhoughton
Bolton
BL5 2PJ

ACTION

1. By an application dated 19 April 2013 (“the Application”) Paul Catterall t/a Deal

Direct Insurance Bureau “Mr Catterall”) applied under section 55A of the Financial
Services and Markets Act 2000 (“the Act”) for Part 4A permission to carry on the
regulated activities of:

i. Advising customers on non-investment insurance contracts

ii. Arranging (bringing about) deals in non-investment insurance contracts

iii. Making arrangements with a view to transactions in non-investment

insurance contracts

iv. Dealing as agent in non-investment insurance contracts

v. Assisting in the administration and performance of a non-investment

insurance contract

vi. Agreeing to carry on a Regulated Activity

2. The Application is incomplete.

3. For the reasons listed below, the Authority has refused the Application.

SUMMARY OF REASONS

4. By its Warning Notice dated 31 January 2014 (“the Warning Notice”) the

Authority gave notice that it proposed to refuse the Application and that
Mr Catterall was entitled to make representations to the Authority about that
proposed action.

5. As no representations have been received by the Authority from Mr Catterall

within the time allowed by the Warning Notice, the default procedures in
paragraph 2.3.2 of the Authority’s Decision Procedure and Penalties Manual apply,
permitting the Authority to treat the matters referred to in its Warning Notice as
undisputed and, accordingly, to give a Decision Notice.

6. By its Decision Notice dated 10 March 2014 (“the Decision Notice”), the Authority

gave Mr Catterall notice that it had decided to take the action described above.

7. Under section 133(1) of the Act Mr Catterall had 28 days from the date the

Decision Notice was given to refer the matter to the Upper Tribunal (formerly
known as the Financial Services and Markets Tribunal). No referral was made to
the Upper Tribunal within this period of time or to date.

8. Under section 390(1) of the Act, the Authority, having decided to refuse the

Application and there having been no reference of that decision to the Tribunal,
must give Mr Catterall Final Notice of its refusal.

9. On the basis of the facts and matters described below, the Authority is not

satisfied that Mr Catterall is able to meet the threshold conditions required to
perform the controlled functions to which the Application relates. Mr Catterall has
failed to satisfy the Authority in respect of his honesty, integrity, competence and
his financial soundness.

10. In particular, Mr Catterall:

i.
Failed to disclose to the Authority his previous convictions for a number of
criminal offences. Both the nature of these criminal offences and the failure
to disclose them raises serious concerns about his honesty and integrity;

ii.
Failed to satisfy the Authority of his having relevant and up to date
experience to be a general insurance intermediary;

iii.
Failed to provide the Authority with an adequate business plan to show how
the business of Mr Catterall is to be conducted;

iv.
Failed to provide the Authority with a financial forecast; and

v.
Failed to satisfy the Authority about his ability to meet the Authority’s
capital requirements for a sole trader general insurance intermediary.

11. In light of the above, the Authority is not satisfied that the Threshold Conditions

for Appropriate Resources, Suitability and Business Model are met

DEFINITIONS

12. The definitions below are used in this Final Notice.

“the Act” means the Financial Services and Markets Act 2000

“the Authority” means the body corporate previously known as the Financial
Services Authority and renamed on 1 April 2013 as the Financial Conduct
Authority

FACTS AND MATTERS

13. The Applicant submitted an application for part 4A permission on 19 April 2013.

The application was incomplete insofar as it incorrectly included a supplement on
the assumption that the firm was a personal investment firm as opposed to a
general insurance intermediary. However, the rest of the application used the
correct forms. The application remains incomplete.

14. The Authority raised a number of concerns with Mr Catterall about the application

by letter of 8 July 2013. The Applicant provided additional information in further
correspondence but the application remained deficient.

Inadequate disclosures

15. As part of the application process, when asked if he had ever been convicted of

any criminal offences, Mr Catterall replied “no”. The application was accompanied
by a signed declaration which acknowledged that providing the Authority with
information which is false or misleading in a material particular may be a criminal
offence.

16. Checks made by the Authority established that Mr Catterall has seventeen

previous convictions for various criminal offences committed between 1971 and
2000. These include convictions for a number of dishonesty offences.

17. In considering the impact of an individual’s criminal record on an application for

part 4A permission, the Authority will give particular attention to criminal offences
involving
dishonesty,
even
where
those
are
spent.
Additionally,
the

non-disclosure of previous convictions is taken very seriously by the Authority.

18. The existence of the previous convictions together with the non-disclosure of this

material information raises serious concerns regarding Mr Catterall’s honesty and
integrity.

Lack of experience

19. Mr Catterall asserts that he has over twenty years of experience in the general

insurance broking industry. However, checks conducted by the Authority
established that the three companies with whom Mr Catterall had held a role as a
director (Catterall Finance Ltd, Motorlink Insurance Bureau Ltd and Lifelink
Insurance Bureau Ltd) were dissolved between 1993 and 1996.

20. No further evidence is known, or has been provided, to the Authority which

indicates that Mr Catterall has actively advised in the general insurance industry
since 1996. This is supported by Mr Catterall’s written confirmation dated
4 November 2013 that he has been unemployed for the last sixteen years.

21. The Authority needs to be certain, when authorising new firms, that its staff have

relevant and up to date experience and the required qualifications where
appropriate. The Authority is not satisfied that Mr Catterall has relevant and up to
date experience to advise on general insurance.

Inadequate business plan

22. The original application for Mr Catterall did not include a business plan to provide

the Authority with an indication as to how the business of Mr Catterall is to be
run. Following requests by the Authority, Mr Catterall provided various
manuscript documents. However, Mr Catterall has failed to provide sufficient
information or clarity to enable the Authority to be satisfied that the business of
Mr Catterall will be run in a prudent fashion.

Lack of financial forecast

23. The original application did not include a forecast opening and closing balance

sheet, monthly profit and loss and monthly cash-flow forecast. Guidance notes
supporting the application make it clear that the Authority requires this
information as part of the application process. Mr Catterall has failed to provide
this information. His explanation for this is that he does not consider such
forecasts to be applicable to his application. This is an important aspect of the
application which remains unanswered.

Means of meeting Authority capital requirements

24. A breakdown of personal assets and liabilities has not been provided. The

Authority has been provided with a valuation for items of jewellery from a firm of
jewellers. However, this does not provide sufficient comfort that Mr Catterall will
be able to meet Authority capital requirements for a sole trader general insurance
intermediary.

IMPACT ON THE THRESHOLD CONDITIONS

25. The regulatory provisions relevant to this Final Notice are referred to in Annex A.

Threshold Condition 2D – Appropriate Resources

26. Mr Catterall’s resources will not, in the opinion of the Authority, be appropriate in

relation to the regulated activities he seeks to carry on.

27. The inability to complete an adequate business plan along with a financial

forecast or to demonstrate how the Authority’s capital requirements are to be met
evidences that Mr Catterall is not competent to be a directly authorised general
insurance broker intermediary.

Threshold Condition 2E - Suitability

28. Mr Catterall has not satisfied the Authority that he is a fit and proper person

having regard to all the circumstances.

29. Specifically Mr Catterall failed to disclose his previous convictions for various

criminal offences committed between 1971 and 2000. These include convictions
for a number of offences involving dishonesty. The existence of the previous
convictions together with the non-disclosure of this material information raises
serious concerns regarding his honesty and integrity.

30. Furthermore, Mr Catterall has not evidenced that he has relevant and up to date

experience to advise as a general insurance intermediary.

Threshold Condition 2F – Business Model

31. Mr Catterall has failed to complete an adequate business model that would

provide the authority with information as to how the business is to be conducted.
This threshold condition has, therefore, not been satisfied.

32. On the basis of the facts and matters described above, the Authority has

concluded that Paul Catterall t/a Deal Direct Insurance Bureau will not satisfy,
and continue to satisfy, the threshold conditions in relation to all of the regulated
activities for which Mr Catterall would have permission if the application was
granted.

IMPORTANT NOTICES

33. This Final Notice is given under section 390(1) of the Act.

34. Sections 391(4), 391(6) and 391(7) of the Act apply to the publication of

information about the matter to which this Notice relates. Under those provisions,
the Authority must publish such information about the matter to which this Notice
relates as the Authority considers appropriate. The information may be published
in such manner as the Authority considers appropriate. However, the Authority
may not publish information if such publication would, in the opinion of the
Authority, be unfair to you or prejudicial to the interests of consumers or
detrimental to the stability of the UK financial system.

35. The Authority intends to publish such information about the matter to which this

Final Notice relates as it considers appropriate.

Authority contacts

36. For more information concerning this matter generally, contact Richard Eager,

Acting Manager, Permissions Department at the Authority (direct line: 020 7066
2492 / email: Richard.eager@fca.org.uk).

Graeme McLean
Chair of the Regulatory Transactions Committee

ANNEX A – REGULATORY PROVISIONS RELEVANT TO THIS FINAL NOTICE

Relevant provisions of the Authority’s Handbook

1. Section 55A(1) of the Act provides for an application for permission to carry on

one or more regulated activities to be made to the appropriate regulator. Section
55A(2) defines the “appropriate regulator” for different applications, and includes
the FCA (section 55A(2)(b)) Section 55A(5) describes a permission given by the
appropriate regulator under this Part as “a Part 4A permission”.

2. Section 390(1) of the Act states that if the appropriate regulator has given the

person a decision notice and the matter was not referred to the Tribunal the
appropriate regulator must, on taking the action to which the decision notice
relates, give the person concerned a final notice.

3. Section 391(4), (6) and (7) of the Act provides that the appropriate regulator

must publish such information about the matter to which a final notice relates as
it considers appropriate. The appropriate regulator may not publish information if
publication would, in its opinion, be unfair to the person with respect to whom the
action was taken, prejudicial to the interests of consumers, or detrimental to the
stability of the UK financial system. Information is to be published under this
section in such manner as the appropriate regulator considers appropriate.

4. In exercising its powers in relation to the granting of a Part 4A permission, the

Authority must have regard to guidance published in the Authority Handbook,
including the part titled Threshold Conditions (“COND”). The main considerations
in relation to the action specified are set out below.

Threshold condition 2D: Adequate Resources

5. COND 2.4.4G states that, when assessing whether a firm has appropriate

resources, the Authority will have regard to matters including:

1.
the skills and experience of those who manage the Applicant’s affairs;

2.
whether the Applicant’s non-financial resources are sufficient to enable the
applicant to comply with:

(a)
requirements imposed or likely to be imposed on the Applicant by
the FCA in the course of the exercise of its functions; and

(b)
any other requirement in relation to whose contravention the FCA
would be the appropriate regulator for the purposes of any
provision of Part 14 of FSMA

6. COND 2.4.1A also provides that the matters which are relevant in determining

whether the Applicant has appropriate financial resources include:-

1.
the provision an Applicant makes and, if the Applicant is a member of a
group, which other members of the group make, in respect of liabilities;
and

2.
the means by which the Applicant manages and, if the Applicant is a
member of a group, by which other members of the group manage, the
incidence of risk in connections with the applicant’s business.

Threshold condition 2E: Suitability

7. COND 2.5.1A states that the Applicant must be a fit and proper person having

regard to all the circumstances, including, amongst other things:

1.
the need to ensure that the Applicant’s affairs are conducted in an
appropriate manner, having regard in particular to the interests of
consumers and the integrity of the UK financial system;

2.
whether those who manage the Applicant’s affairs have adequate skills
and experience and act with probity;

3.
whether the Applicant’s business is being, or is to be, managed in such a
way as to ensure that its affairs will be conducted in a sound and prudent
manner; and,

4.
the need to minimise the extent to which it is possible for the business
carried on by the applicant, to be used for a purpose connected with
financial crime.

8. COND 2.5.6G states that the FCA may have regard to a number of factors when

assessing whether the Applicant will satisfy, and continue to satisfy this threshold
condition including whether:

1.
The firm has made arrangements to put in place an adequate system of
internal control to comply with the requirements and standards for which
the FCA is responsible under the regulatory system

2.
The firm has been convicted, or is connected with a person who has been
convicted of any criminal offence; this must include, where provided for by
the Rehabilitation Exceptions Orders to the Rehabilitation of Offenders Act
1974 or the Rehabilitation of Offenders (Northern Ireland) Order (as
applicable), any spent convictions; particular consideration will be given to
offences of dishonesty, fraud, financial crime or an offence under
legislation relating to companies, building societies, industrial and
provident societies, credit unions, friendly societies, banking, other
financial services, insolvency, consumer credit companies, insurance,
consumer protection, money laundering, market manipulation and insider
dealing, whether or not in the United Kingdom.

3.
The firm, or a person connected with the firm, has been a director, partner
or otherwise concerned in the management of a company, partnership or
other organisation or business that has one into insolvency, liquidation or
administration while having been connected with that organisation or
within one year of such a connection.

4.
In the case of a firm that carries on insurance mediation activity:

(a) a reasonable proportion of the persons within its management
structure who are responsible for the insurance mediation activity; and,

(b) all other persons directly involved in its insurance mediation activity;

demonstrate the knowledge and ability necessary for the performance of
their duties; and

(c) all the persons in the management structure and any staff directly
involved in insurance mediation activity are of good repute (see MIPRU
2.3.1 R (Knowledge, ability and good repute)

Threshold condition 2F: Business Model

9. COND 2.7.1 states that the Applicant’s business model must be suitable for a

person carrying on the regulated activities the Applicant seeks to carry on. The
FCA may have regard to a number of factors when assessing whether the
applicant will satisfy and continue to satisfy this Threshold Condition, including
the following:

(a)
Whether the business model is compatible with the Applicant’s

affairs being conducted, and continuing to be conducted in a sound and
prudent manner;

(b)
the interests of consumers; and

(c)
the integrity of the UK financial system