Royal London-owned United Friendly Insurance and Refuge Assurance have been fined £350,000 each by the PIA for breaching regulations on with-profits end owment sales.
The PIA found that the firms failed to take account of the customer's stated savings objectives, did not ensure the customer could afford the contract, did not establish whether the customer needed the contract, failed to keep sufficient customer records and did not issue proper disclosure literature.
The PIA says both firms also failed to maintain an adequate system of compliance control and monitor control of their staff and did not deal with customer complaints in an effective and efficient manner.
The breaches, made bet ween August 1997 and July 1998, were discovered after supervision visits by the PIA.
Both companies were taken over by Royal London last April. The PIA says the life offices and the parent com pany have committed themselves to a radical and thorough over haul of the business.
Royal London says it was aware of the impending fines when it took over the firms.
Royal London chief executive Mike Yardley says: “Uni ted Friendly and Refuge Assurance accept the PIA's findings. Investigations are well under way to ensure that those customers who have been disadvantaged are fully compensated. We regret any distress caused to customers.”