Britain's Friends Provident was yesterday fined a record £450,000 sterling for "serious failings" linked to misselling of pensions in the late 1980s and early 1990s.
The fine came a day after Midland Bank was stung with a £150,000 fine from the Investment Management Regulatory Organisation (IMRO) for its shortcomings in dealing with the problem. British pensions regulator, the Personal Investment Authority (PIA), said yesterday's fine was imposed after Friends Provident's failure to take all reasonable steps to carry out a review of the misselling after an investigation by Britain's Securities and Investments Board three years ago.
The company, Britain's fourth largest mutual insurer, was also ordered to pay PIA costs of £20,000. Friends Provident said in a statement it was disappointed by the move, which followed an interim assessment of progress made by the group at end March.
But it said it had decided not to appeal because of its policy of co-operating with the regulators.
The company said "real progress" had been made in recent months and it was still confident it would meet the targets set by the PIA for clearing its 1,730 priority cases by the end of 1997 and all cases by the end of 1998.
Its total of 6,414 cases is dwarfed by the 60,000 facing Britain's largest life insurer Prudential Corp Plc , which admitted earlier this month it would fail to meet its first deadline for settling urgent cases.
Friends Provident is the latest in a long list of companies to have fallen foul of the regulators as they step up efforts to sort out the misselling problem, whereby people were persuaded to switch out of occupational into personal pension schemes.
According to latest estimates from the Treasury as many as 2 million people may have been wrongly advised by the financial services industry in this way.
The PIA have so far imposed 43 fines totalling well over £1 million.
There are 570,000 priority cases in which victims have already died or retired which must be settled by the end of next year.
Non-priority cases could eventually come up to as much as 1.5 million.
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