The PIA said a visit in January last year revealed the company had lost track of 5760 customers who were in urgent need of

The PIA said a visit in January last year revealed the company had lost track of 5,760 customers who were in urgent need of compensation.
The company had also failed to pursue 1,500 cases which may have been in urgent need of compensation amounting to thousands of pounds because they had been mis-sold personal pensions.London & Manchester, a home service company which had 110,000 personal pensions, had devoted just 20 staff to the review before January 1997. It had planned to process the 5,760 cases “later in the process” – despite the fact it was aware of a deadline for urgent cases of 31 December 1996.L&M has now cleared up 96 per cent of its urgent cases but still has tens of thousands of less urgent ones.. He said the company was “extremely disappointed” with the fine. The company now has 110 staff carrying out the review.The size of the fine is thought to be due in part to repeated legal objections by London & Manchester after the PIA began proceedings last January.Ben Gunn, managing director of L&M’s life insurance wing, yesterday admitted the company’s provision for pension mis-selling, currently pounds 30m, would have to rise. Gerald Gregory, director of mutuality and marketing at Britannia, said Mr Hardern applied two weeks too late to take part in elections to the board of directors..

Financial regulators yesterday handed down a record fine of pounds 525,000 to London & Manchester Assurance after a year-long wrangle over its failure to compensate victims of pension mis-selling in time. The Personal Investment Authority (PIA) ran up costs of pounds 125,000 which will also be billed to L&M, giving a total of pounds 650,000. Manulife, Canada’s largest life insurer, has already announced plans to float. The Australian giant AMP has also decided to de-mutualise following last year’s successful flotation of its rival, Colonial.Although Sloc has 600,000 policyholders in the UK, only holders of with- profits policies will be eligible for windfalls.Sloc, which is unconnected to its Bristol-based rival Sun Life, has assets under management of C$174bn (pounds 73bn) and a surplus of C$5.5bn (pounds 2.3bn).In a separate development, Michael Hardern, the self-styled “carpetbagger- in-chief”, yesterday fell at the first hurdle trying to force a flotation at Britannia Building Society. Mr Turner said: “We support the Government’s firm line on public spending.. More than 250,000 UK policyholders with Sun Life of Canada (Sloc) are set for a windfalls that could be worth at least pounds 1,000, it emerged yesterday after the company’s announcement that it plans to float.

Sloc, a mutual insurer, yesterday said it was developing plans to list on the Toronto Stock Exchange in 1999, distributing shares to all eligible policyholders. John D McNeil, chairman and chief executive of Sun Life of Canada, said: “Management believes de-mutualisation can provide significant benefits to our 1 million participating policyholders world-wide. Becoming a publicly traded company can provide substantial value for our policyholders and unlock our capital base.”
The decision reflects a growing trend in Canada and Australia to de-mutualise. But the Treasury shrugged off the complaint.A spokesman said a 2 per cent cut in the rate of corporation tax announced in July and a further 1 per cent cut announced in November were worth pounds 9bn to business in today’s money. He said the CBI had welcomed the proposals in principle in November.Yesterday also brought fresh criticisms of the proposed ISAs.

The National Institute of Economic and Social Research warned the measure could reduce the nation’s wealth by about pounds 31bn, the equivalent of 4 per cent of GDP, because ISAs would cut savings by the well-off without increasing savings by the low-paid nearly as much.However, both the CBI and NIESR defended the Chancellor against accusations he was building up a war chest of tax revenues to spend in the run-up to the next election. Kate Barker, chief economist, said: “This would help the fast-growing firms the Government wants to encourage to invest without costing very much.”It was the first real criticism the employers’ organisation has levelled publicly at the Government since 1 May. The CBI said that measures in last July’s Budget and proposals in November’s pre-Budget Report would add pounds 22bn to the tax burden on business during this Parliament. Adair Turner, director-general, called on Gordon Brown, the Chancellor of the Exchequer, to change plans to abolish advance corporation tax as these would reduce companies’ cash flow available for investment.
“The most worrying impact is going to be on small and medium-sized companies,” he said.The CBI would like special measures to help small firms with sales of less than pounds 300,000 adjust to the tax changes extended to companies in the pounds 300,000 to pounds 1.5m sales bracket. However, fresh accusations that the proposed Individual Savings Accounts (ISAs) will damage savings will cause more concern. Complaints from the Confederation of British Industry (CBI) about higher taxes on business got an unsympathetic response from the Treasury yesterday.