Treasury orders Colonial probe

The Treasury and the Department of Trade and Industry have ordered City financial regulators to undertake a "crash investigation" into insurance and pensions group Colonial Mutual.

The review follows leaked internal documents, published two weeks ago in the Independent on Sunday, which showed Colonial was concerned about training and supervision of salesmen and administration as recently as May this year.

Ten days ago, the Australian-run insurer announced the terms of its long- awaited worldwide demutualisation, under which more than 350,000 UK policyholders will receive cash or shares worth pounds 285 on its planned pounds 1bn flotation next year.

The personal financial watchdog, the Personal Investment Authority, has come under fire for ineffective investigations of claims by former managers and trainees about Colonial's training and supervision of salesmen as far back as 1990.

Following the criticism, Treasury and DTI civil servants have now asked Jane Coakley, the Securities and Investments Board official responsible for supervising the PIA, to ensure that it mounts a proper investigation.

The case has been handed to Graham Turner, the PIA's head of field investigations, who isstarting a further review from scratch. Yesterday, neither Mr Turner nor Colette Bowe, the PIA's chief executive, would comment directly on the case.

But one SIB source said: "The affair under review is clearly the responsibility of the self-regulatory organisation. We as supervisors of the system follow up any indications that anything is going wrong with that supervision. There is an automatic follow-up of everything in the press."

Colonial's general manager, Rob Garnsworthy, has said that the insurer has thoroughly cleaned up its act. It was previously fined by regulators and sacked two managers in 1994 over allegations of falsifying training records.

However, internal documents prepared ahead of the PIA's last periodic inspection visit in June highlighted concerns voiced in May by the firm's compliance officer and its own internal review team over training, supervision, competence and record- keeping.

The visit was postponed from December at Colonial's request. Sources say the regulator conducted but a cursory inspection, despite assurances in February that it would re-open an investigation into previous allegations.

One of the memoranda, to national training manager Eric Burrow, was available to the PIA team at the time of the inspection.

The second, a hard-hitting report from compliance officer John Anthony to Mr Garnsworthy, was not. It was,however, sent to the PIA by the company after the Independent on Sunday faxed a copy to Colonial for comment three weeks ago.

Start your day with The Independent, sign up for daily news emails
News
i100
Arts and Entertainment
Billie Piper as Brona in Penny Dreadful
tvReview: It’s business as usual in Victorian London. Let’s hope that changes as we get further into the new series spoiler alert
Life and Style
A nurse tends to a recovering patient on a general ward at The Queen Elizabeth Hospital in Birmingham
health
News
science
Arts and Entertainment
No Offence
tvReview: No Offence has characters who are larger than life and yet somehow completely true to life at the same time spoiler alert
News
Chuck Norris pictured in 1996
people
ebooks
ebooksA celebration of British elections
Arts and Entertainment
Sarah Lucas, I SCREAM DADDIO, Installation View, British Pavilion 2015
artWhy Sarah Lucas is the perfect choice to represent British art at the Venice Biennale
News
A voter placing a ballot paper in the box at a polling station
i100
News
people
Arts and Entertainment
The Queen (Kristin Scott Thomas) in The Audience
theatreReview: Stephen Daldry's direction is crisp in perfectly-timed revival
Sport
football
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant - Swiss Banking and Finance

£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...

Ashdown Group: Marketing Executive - 6 month FTC - Central London

£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...

Ashdown Group: Junior Project Manager (website, web application) - Agile

£215 per day: Ashdown Group: Junior Project Manager (website, web application ...

Guru Careers: Software Engineer / Software Developer

£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power