Well-known Melbourne broker Jeffrey McNally last week found himself bound by Federal Court orders not to sell policies on behalf of unauthorised foreign insurer Atlantic & Pacific.

The orders also applied to two companies associated with Mr McNally, Allied Asia Holdings and Allied Asia Underwriting Agencies. Mr McNally was also the founder of insurance portal Insbroker which went out of business late last year.

Now ASIC has refused to renew the registration of Allied Asia, which it described as “a broker specialising in general insurance, including public liability policies with overseas insurance companies”.

ASIC said in a statement it had determined that it was not appropriate to renew Allied Asia’s registration as an insurance broker after finding that Allied Asia had failed to discharge the ordinary obligations of an insurance intermediary.

It also found that Allied Asia had acted in a false and misleading manner in dealing with its clients. “Under the Insurance (Agents and Brokers) Act, an insurance broker is required to disclose brokerage and any additional fees or charges to its clients.”

ASIC alleged that Allied Asia arranged policies for clients after increasing the premium quoted to the broker by the insurer. “The increased premium was charged to clients without the knowledge or consent of the clients or of the insurer that issued the policies. Allied Asia retained the difference in the premium quoted by the insurer and the premium paid by the client, in addition to the commission it was entitled to receive.”

Allied Asia also failed to lodge audited accounts for the financial year ended 30 June 2001, and failed to lodge audited accounts within the extended timeframes for the years ended 30 June 2000 and 30 June 1999. 

Allied Asia has the right to seek a review of ASIC’s decision before the Administrative Appeals Tribunal.