The FSA has fined Combined Insurance Company of America (CICA) £2.8m for poor trading practices that put customers at risk, according to reports in IFAonline.co.uk. CICA sold insurance policies via self employed contractors but was found to have failed to properly manage its sales processes.
CICA did not properly ensure its agents had the skills and knowledge to provide advice and focused on the number rather than the ability of its recruits, the regulator said. The insurer did not ensure its agents recorded all the relevant information when advising customers on insurance products, the FSA said.
The regulator also found the remuneration structure for the sales force, a commission-only structure, was high-risk as it placed emphasis on sales volumes rather than the quality of sales.
CICA did not take effective action against agents who had received complaints or broken company rules or properly monitor claims handling, the FSA said.
"Firms must ensure that protecting the interests of their customers is at the heart of every aspect of their business." Said the FSA.