Norwich Union staff aid the carpetbaggers
Hundreds of prospective Norwich Union clients jammed into its Dublin office, clamouring to be allowed to take out life insurance cover and grab up to pounds 500 worth of free shares when the company floats on the stock market next year. Some potential customers demanded up to two dozen each.
The help given by Norwich Union staff to "carpetbaggers" hoping to beat the company's own deadline emerged as the insurer was hit by a flood of new proposals from across the UK.
Independent financial advisers, most of whom are paid commission based on the policies they sell, were said to be aiding clients get round the deadline by falsely claiming to be a "pipeline case".
The insurer told its IFAs that if application forms and cheques were signed on Monday or Tuesday, they would be accepted until close of business on Friday.
One London IFA, who refused to be named, said last night: "I have had a client come to me and ask if I could help, which I refused. But I know of at least two quite large firms, one of them very large, whose advisers have been doing it.
"They've told people that once the free shares come through they can lapse their policies. Most of the commission is clawed back, but some of it will stay with the adviser or they claim a fee for helping the client."
Advisers in Sheffield, Manchester and Bristol confirmed they were aware that some post-deadline applications were being made although they all claimed not to be involved. In Dublin, eight brokers who were contacted said they were accepting backdated applications.
Michael Rich, head of technical services at the IFA Association, a trade body which represents more than 2,000 advisers, said Norwich Union had "tried to be too fair".
He said: "To me, it is leaving the door open to the few who will try to bend the rules to suit themselves or give their clients an extra edge."
Mr Rich saidNorwich Union should have insisted it was notified by close of business on Wednesday of any cases in the pipeline so it knew what was coming.
His comments came as the Personal Investment Authority, the financial regulator, threatened to discipline any financial adviser caught backdating Norwich Union policy applications. A PIA spokesman said last night: "The thrust of our regulations is that advisers should be fair, clear and not misleading. This practice looks like it is misleading clients.
"We would take an extremely dim view of that. Any sanction would depend on the severity, frequency and how badly the individual was advised."
The spokesman said people who took up the offer to buy a deadline-busting Norwich Union policy may be buying an inappropriate financial product. He appealed for anyone who may have been asked to take advantage of the scam to contact the PIA.
A Norwich Union spokeswoman said last night: "We are aware of these allegations and are investigating them." She said that if any applications were found to have been backdated, the company would give the offender's name to the PIA.
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