Elderly and vulnerable people were left without adequate household or motor insurance owing to fraud, the City watchdog has said.
The Financial Services Authority (FSA) handed down a near-record £150,000 fine to a company director in the case for failures regarding insurance policies.
Four other people were also banned following a separate insurance investigation by the FSA.
Fourteen people in insurance businesses have been banned this year by the FSA.
One of the largest fines - of £150,000 - was handed down by the FSA to Andrew Jeffery, from West Sussex.
The director of Jeffery Flanders (Consulting) Limited failed to put insurance policies in place despite collecting payment of hundreds of pounds from customers, according to the watchdog.
"In so doing, he exposed customers to risks such as not having adequate household or motor insurance," the FSA said.
"This was particularly serious as many of the customers were elderly or vulnerable. He also knowingly forged documentation and correspondence potentially to mislead insurance companies."
He also obstructed the FSA's investigation, the watchdog said.
In a separate case, four people - Barrie Duncan Aspden, Melanie Aspden, Gaenor Clayton and Paul Willment - were all banned for their part in issues relating to Orion Direct Limited and motor insurance site Peppercom.
Barrie Duncan Aspden used approximately £300,000 of Orion client money to finance the creation of a new company Click the Pepper, which traded as Peppercom.
"His actions meant that several hundred customers of Orion were put at risk of being uninsured because their premiums were misused," the FSA said.