Friends Provident handed record pounds 450,000 fine
Wednesday 01 October 1997
Some 10 companies have now been ordered to pay a total of pounds 2m in compensation to victims of the pension mis-selling scandal after the record pounds 450,000 fine handed out to Friends Provident yesterday.
Sedgwick Noble Lowndes is believed to be one of the four remaining companies being investigated by regulators for missing targets for compensating investors.
The company was "named and shamed" in June by Helen Liddell, the Economic Secretary to the Treasury. It had accused her of relying on inaccurate briefings from Treasury advisers in her efforts to speed up compensation payouts to investors.
Sedgwick is likely to be fined hundreds of thousands of pounds because of slow progress in a review of mis-selling originally meant to be completed by January 1996. It could be liable to pay compensation to up to 8,300 investors owed between pounds 5,000 and pounds 8,000 each.
Inspectors from the Personal Investment Authority (PIA) will this week visit Sedgwick's offices to monitor progress in the review. By September 18 this year, Sedgwick had assessed just 840 cases and offered redress to just 421 investors, despite a UK staff of more than 2000.
Sedgwick yesterday insisted it was merely a "routine visit". Communications director Byron West said: "We have no knowledge of a fine. We are proceeding with the timetable as agreed with the regulator."
Industry insiders believe Sedgwick's delay in carrying out the review was worsened by arguments with professional indemnity insurers which dragged on into mid-1996.
Friends Provident yesterday said it was "disappointed to say the least" to receive the record fine.
Brian Sweetland, director and secretary of Friends Provident, claimed the life office was on target to meet an agreed deadline for completing 90 per cent of urgent cases by December this year.
He said that by assessing progress as of March this year, PIA was changing the terms of its threats to fine companies and moving the deadline. "We thought we were on target, we had agreed targets. Judge us by those - don't just pick a date.''
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