Lautro warns of tougher regime

ONE IN FOUR life insurance companies displayed serious shortcomings in their compliance systems when they were visited by Lautro, the financial regulator said yesterday.

Even among the 75 per cent of companies considered broadly adequate, most needed 'a considerable amount of work' before they could be declared fit, Lautro said. It warned that in future it is likely to resort more rapidly to disciplinary action when it finds serious shortcomings.

In the year covered by Lautro's report, complaints received rose by 17 per cent to more than 2,000 and it took on 19 formal investigations, a 46 per cent increase.

Lautro fined three companies a total of pounds 150,000 and made two awards of more than pounds 50,000 to investors. These cases were among 27 complaints upheld out of 51 considered by its complaints sub-committee. Since then, Lautro has imposed much heavier fines on London and Manchester, Guardian Royal Exchange and Scottish Widows.

Fimbra has suspended the investment business of Carnforth Insurances Services of Carnforth, Lancs, and South Yorkshire Financial Planning of Doncaster, Yorks.