Cornhill fined pounds 150,000 over insurance salesmen

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The Independent Online
CORNHILL Insurance, the test cricket sponsor, has been fined pounds 150,000 for failing to exercise proper control over two firms of life insurance salesmen.

Cornhill is understood to have dragged its heels over the disciplinary proceedings brought by Lautro, the life insurance regulator. The proceedings came to a sudden conclusion on Thursday when Cornhill agreed to admit two charges of misconduct.

The Cornhill Test series against New Zealand is due to start next week. A fine imposed in the middle of a test match could have increased the damaging publicity, it was suggested. Cornhill is owned by Allianz, the giant German insurer.

Cornhill's lax procedures allowed unauthorised salesmen to sell life insurance policies to customers. Those investors who suffered have been offered their money back with interest. Lautro said this had imposed 'a significant cost' on Cornhill. The insurer also paid Lautro's costs of pounds 45,000.

Weak control of the two firms of appointed representatives and their staff led to a series of problems. Standards of regulatory compliance were insufficient and problems went unaddressed. Salesmen were recruited without satisfactory references, and some failed to complete customer fact find forms.

Cornhill refused to identify the two firms, although one of them was Castle Insurance, a Belfast company. Cornhill has taken control of Castle and changed its management. It now trades as Cornhill Financial Management. The insurer has severed its links with the other problem firm.

Cornhill would not say how many investors had suffered, or how much they had received as compensation.

Last year, Cornhill received pounds 103.8m of life insurance premiums, with general insurance providing the bulk of its pounds 709m of premium income.