About 40,000 people are being warned they are unlikely to have insurance cover after a company was placed into provisional liquidation.
Tribune's offices near Edinburgh, where some staff have been laid off
Tribune Risk and Insurance Services had been selling policies but failed to have them underwritten, according to the Financial Services Authority.
Most of the policies related to home insurance and Tribune had no reserves to meet claims, the FSA said.
A helpline has been set up for policyholders. The number is 0870 1648120.
It is estimated that about £2m worth of claims will not be paid out, with no compensation for policy holders because the company was not authorised to sell insurance.
In a statement, the FSA said Tribune, which is based in Eskbank, near Edinburgh, had been operating without its authorisation.
"The FSA is therefore warning around 40,000 policy holders who have taken out household and buildings insurance with Tribune... that they are likely to have no effective cover," it went on.
"We would urge all policyholders with a Tribune household insurance policy to contact their insurance broker or agent immediately to arrange replacement cover."
The FSA asked the Court of Session in Edinburgh to place Tribune into provisional liquidation. The move has meant the loss of 93 jobs.
Bruce Cartwright, one of the joint provisional liquidators, said there appeared to be no chance of policyholders recouping any money.
He told BBC Radio Scotland: "We are obviously looking at the position but from what we have seen in the first 24 hours, there is no fund available to pay claims at the moment."
The company's website stated that Tribune was established in 1998 "to meet the needs of intermediaries like IFAs, mortgage brokers and solicitors".
"Tribune gives these intermediaries access to the insurance products that they and their clients need but that they were finding increasing difficulty to access via their existing arrangements," it said.
Ken Ford, from North Berwick, took out a house insurance policy with Tribune two weeks ago.
He said on Friday: "My first reaction was 'that's not so bad, I've only lost one monthly premium'.
"But I now understand that perhaps I wasn't even on cover for the last couple of weeks so if the house had burned down, then I would really have been in trouble."
Policyholders are being urged to contact their insurance broker or agent immediately. Are you a Tribune policyholder?
Oh my goodness I have a claim going through at the moment. They have just replaced my shower but they are still to pay my hotel cost. It looks like I won't be getting that then.
Lorna Stewart, Aberdeen
We were recommended to Tribune through our mortgage broker, and for three months I thought we had been covered. We have been doing a lot of work on the house and I can't believe that it turns out we weren't covered. It would have left us with no leg to stand on should anything have happened.
I had thought it strange when I didn't see any statement with my insurance documentation saying who the policy was being underwritten by - something you see anywhere else when dealing with a broker.
Paul Heuvelmans, Dunfermline, Fife
I thought that the FSA was there to make sure that this couldn't happen. How can a company trade without FSA authority?
J Lawton, Yorkshire
Disclaimer: The BBC may edit your comments and cannot guarantee that all e-mails will be published.