17 December 2007

Norwich Union Life fined £1.26m

SA Mathieson

The UK’s Financial Services Authority has fined life assurance company Norwich Union Life £1.26 million ($2.54m, €1.77m) for “not having effective systems and controls in place to protect customers' confidential information and manage its financial crime risks” (statement).

The FSA said that fraudsters exploited the weaknesses the life assurance firm’s systems to gain personal information, allowing them to ask for the surrender of the policies of 74 customers, worth £3.3 million, last year.

“Norwich Union Life let down its customers by not taking reasonable steps to keep their personal and financial information safe and secure,” said Margaret Cole, director of enforcement for the FSA, in the statement. “This fine is a clear message that the FSA takes information security seriously and requires that firms do so too.”

The fine exceeds that made against Nationwide building society, of £980 000, earlier this year. The FSA said that Norwich Union Life, a division of Aviva, would have been fined £1.8m but, as with Nationwide, it co-operated fully and settled at an early stage of the investigation, gaining it a 30% discount under the authority’s rules.

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