The society, which has 1.2 million members and manages pounds 3.5bn of funds, admitted it was unable to satisfy itself that all the 70 sales people it recruited last year had been properly vetted in line with regulators' rules.
David Cheeseman, the society's compliance director, also conceded that Liverpool Victoria's records meant it was unable to tell whether any of its sales people had criminal records
"We are not able to satisfy ourselves that we can answer that question," he said. "We have no evidence to suggest that that question is worth asking. That is part of the referencing process. If you have incomplete records then you can't be absolutely certain of the history of that individual."
The Personal Investment Authority, which regulates Liverpool Victoria, requires references to be taken on all new sales staff and their training standards. It said yesterday it would monitor the situation.
Liverpool Victoria said the suspension of staff was at its own instigation after it discovered the poor record-keeping in a routine internal compliance audit last month. It has appointed auditors from Ernst & Young to assist in investigating the problem.
Roy Hurley, chief executive of Liverpool Victoria, said: "This has been a difficult decision to make but we have had no hesitation in believing that it is the right thing to do. We are putting all our efforts into ensuring that our salesforce is reinstated as soon as possible."
The suspension affects not only the 270-strong salesforce but also 450 field agents who collect premiums door to door. Field agents are prevented from introducing new business until the problem has been resolved.
- Andrew VerityReuse content