CLIENTS of a long-established Herefordshire insurance broker now in administration could be without valid cover because their premiums were not passed on to the intended insurer.

The Financial Services Authority (FSA) has warned that Leominster-based Powell Price & Company Ltd no longer has permission to conduct general insurance business or any other regulated financial activity. Robin Gordon-Walker, of the FSA, told the Hereford Times that, as yet, it was not known how many clients were affected or how much money might be involved.

"Our key concern at the current time is to identify those customers who do not have valid insurance cover in place, despite paying premiums," said Mr Gordon-Walker.

The registered office of Powell Price & Co at Old Penny Bank, Burgess Street, Leominster, is locked up. A sign says the office is to let and a notice in the window tells customers that it closed on September 28 and would not be re-opening.

This notice also refers customers to Stourbridge-based insurance broker Ingram Hawkins & Nock Ltd, which has confirmed that Powell Price policies are now in its care. It has set up a freephone (0800 2346651) and website (www.ihnsure.co.uk) to assist former clients of PPCL.

The FSA, which regulates the UK financial services industry, has put out a consumer warning to anyone who arranged insurance cover of any type through Powell Price & Co Ltd (PPCL) trading from the Old Penny Bank address.

This warning states: l PPCL has ceased trading and no longer has permission to conduct general insurance business or any activity regulated by the FSA.

l Some clients of PPCL may have paid premiums to this company in respect of insurance cover to be arranged by it, but the money may not have been paid over to the intended insurer. As a result there may be clients of the company who have no cover.

l Clients of PPCL should contact the insurance company with whom they believed cover was held, to confirm they are covered. If the insurer is not on risk for the cover for which premiums were paid, new cover should be arranged immediately.

The FSA visited Powell Price & Co in September this year having spotted capital requirements deficits in the last regulatory return submitted by the firm for the period ending December 31.

The firm admitted financial difficulties and the fact there was a client account deficit.

Last month, the firm voluntarily applied to vary its business permission and the FSA Register now records that it is subject to a requirement not to conduct any regulated activity.

The firm had Risk Transfer Agreements (RTAs) with some, but not all, of the insurers with whom it dealt. Where RTAs are in place, clients are covered despite the premiums not having been passed on, as the insurer has agreed to accept the risk for the policy.

Where the insurance business is placed with insurers with no RTA, the insurer does not accept the risk until the premium is received.

The Hereford Times had no reply from any of the three Herefordshire phone numbers listed under the Powell Price company name. One rang continuously, another was not recognised and the third did not take incoming calls.

Companies House has the firm incorporated since 1968. It was previously known as Powell, Bowdler & Co Ltd and changed its name in 1985. Offering non-life insurance, life insurance/reinsurance and pension funding, it has no associated branches. The last accounts were made up to the end of 2003. The next accounts were expected at the end of last year but are now listed as overdue.