The FSA announced it has fined Norwich Union Life following an investigation into a series of frauds committed during 2006. Due to some weaknesses in internal controls, 74 policies were fraudulently surrendered and 558 other customers' policies were placed at risk.
Mark Hodges, chief executive of Norwich Union Life, says: "We are sorry that this situation arose and apologised to the affected customers when this happened. We have extensive procedures in place to protect our customers but in this instance weaknesses were exploited and we were the target of organised fraud. While the number of customers affected is very small compared to the number of policies we manage overall, any breach in customer confidentiality is clearly unacceptable. Our customers can, however, be assured that we have taken this matter extremely seriously and have thoroughly reviewed our systems and controls as a result. All of our 7 million customers are protected by our promise that they will be fully reimbursed and will get help and support if they are the innocent victims of fraud."
Both the police and the FSA were informed at the outset and Norwich Union has been working closely with them throughout this period.
Norwich Union Life also acted immediately by taking the following steps which have been acknowledged by the FSA:
All 74 policies were fully reinstated and help and support was given to those affected customers
Full co-operation was given to other agencies, including working closely with the police to identify and arrest the criminals concerned, resulting in 11 arrests to date
A full internal review was carried out to identify any incidents of fraud and an independent third party was appointed to carry out a review of Norwich Union Life's response to this situation and to further review the adequacy of the procedures put in place
Improved anti-fraud procedures were introduced following the above reviews.
Life insurance: News update: December 2007