UK Insurance bosses jailed for fraud

A former insurance chief has been jailed for seven years after being convicted of defrauding investors. Michael Bright, 63, was in charge of Independent Insurance when it collapsed in 2001 in one of the industry's most high-profile insolvencies. Finance director Dennis Lomas received a four-year sentence. Deputy manager Philip Condon was given three years. A jury had heard how the trio masked the firm's financial problems by withholding details of claims.

Probe
About 1,000 jobs were lost in the collapse of the company - which had previously been regarded as a financial success story.

The three men were charged in December 2005 after a probe by the Serious Fraud Office and City of London police into the firm's closure. The SFO said that the insurer's accounts for 2000 showed a £22m profit when they should have indicated a loss of at least £180m.

London's Southwark Crown Court heard that the trio knew that the market value of the company would drop "dramatically" if full details of the firm's losses were known.
Bright, of Smarden, Kent was convicted of two counts of conspiracy to defraud.
Lomas, 56, of Haywards Heath, West Sussex, was found guilty of the same offences.
Meanwhile Condon, 48, from Sevenoaks, Kent, was convicted of one conspiracy to defraud charge and cleared of another. Bright and Lomas were also found guilty of "making incomplete disclosure" of its reinsurance agreements between 1998 and 2001.

Damning audit
The court heard the trio hid the company's ailing health from fellow directors, professional advisers and investors in a bid to protect their reputations, jobs and salaries.
Undisclosed liabilities were "buried", figures manipulated and "bad" reinsurance contracts concealed. Jurors were told they even "suppressed" a damning internal audit which highlighted major concerns a year before the company went under.

The three men insisted they only ever did their job openly, honestly and to the best of their abilities.

Some of the firm's 500,000 private and corporate policyholders have been given a total of £357m from the Financial Services Authority's compensation scheme since the collapse.

-BBC NEWS