Who owns the car? Normally, the policy requires that the policy owner has "insurable interest", ie, they have to own the car.
Did you tell the insurance company that the second car was driven by your brother, and give them his date of birth and license number? Did you give them the "garaging address" for the car? You will have to call your agent to update the information to be sure he is covered.
Yes, if he gets in an accident, YOUR POLICY will pay, which will mean you can be surcharged for it. If the car is owned by you, you can ALSO be personally sued, if, for example, you have "minimum limits" and he does more damage than you have insurance. Your policy will write a check for your minimum limits, and your wages can be attached for the rest.
If you "insure" his car without adding him as a driver, in some states, the insurance company can flat out deny the claim - and the person he hits can come after you. In some states you can be prosecuted for fraud. In most states, you are required to list all "regular operators" of the vehicles listed on the policy. In many states, the insurance company doesn't have to pay a single dime, if the policy is in your name, and you don't own the car.
Specific answers will depend on which state you live in, who owns the car, and what your specific policy says. Companies like Progressive are extremely strict on coverage - if the driver isn't listed, they aren't covered - and neither is the car. You should really talk to your agent about this - but if it were me, I'd NEVER do this - not even for my brother. Just the fact that it's cheaper on your policy should tell you, he's much more likely to put in a claim, which will follow YOU for years, and raise YOUR rates.