The short answer is yes. If you don’t declare your points then your insurance certificate is invalid. It means that if you are involved in an accident with somebody else, the insurance company will pay out, but they will come after you for the money.
If your bike is stolen, burnt, damaged or anything else, your insurance company will not have to pay you a penny. In the light of this, if you choose to get no insurance at all, and then have an accident, any 3rd party will be covered by the Motor Insurers Bureau, but the Motor Insurers Bureau are not a bunch of soft lads. If they have got any scope at all of getting money off you, they will take it.
In a case I was involved in where I had to sue a BMW 5 Series driver who had all sorts of engine mods done to the 3 litre engine (which he told his insurer was a 1.8) I happen to know that his own insurers bankrupted him, and took his house.
As to what the MIB do, they have an absolute duty to get back any monies that they can off anyone else who is involved, and they are relentless in hunting people down for money. You will not be able to breath easy for six years after an accident in which the MIB pay out on your behalf, and if you later come into money and the MIB find out about it, there is nothing stopping them going back to Court and asking the Judge for permission to hunt you down further.
Fast Bikes Issue Number April 2004