AIG fined for selling insurance without proper checks

In one case, UNAT had not completed proper checks on a call centre more than 250 days after it had begun selling, while another sold 4,000 policies for six months without FSA authorisation, the regulator said.

Croydon-based UNAT sold more than 150,000 insurance products – mainly personal accident policies – through the nine UK-based centres before calling a halt in March last year.

Margaret Cole, the FSA’s enforcement director, said: “Selling general insurance products to consumers through call centres involves greater risk. UNAT was aware of the higher risk but failed to carry out proper checks on the call centres it used.

“UNAT’s failure to have effective control over its due diligence process exposed customers who bought policies from the call centres to an unacceptable level of risk that they would not be treated fairly.”

The company would have been liable for an £800,000 penalty, but its co-operation with the FSA earned it a 20% reduction.

The FSA’s final penalty notice added: “Confidence in the market for general insurance products may be undermined if firms fail to take appropriate care in the process of selecting third party call centres to sell products to consumers on their behalf.”

UNAT has been working with the regulator since the discovery of the issues to ensure that none of its customers had lost out.

A spokesman for the firm said: “We take our responsibilities in relation to our customers extremely seriously. When we first identified these issues we informed the FSA and immediately undertook our own extensive investigation.

“We can confirm that we have since implemented improvements to ensure our controls in this area are working effectively.

“We are confident that the actions we took following our review means that none of our customers suffered any loss as a result of these issues.”