The Financial Services Authority (FSA) has fined certain life insurance companies in the Royal & Sun Alliance group (R&SA) £1.35 million.
This comes as a result of systemic weaknesses in their internal controls arising across significant areas of the pensions review during the period up to August 2000.
The FSA's investigation and remedial action undertaken by R&SA has identified up to 13,500 consumers whose cases had, in error, not previously been identified for review by R&SA.
Without this work those consumers may not have been paid redress exceeding £32 million.
Carol Sergeant, managing director for regulatory processes and risk at the FSA, says: “The FSA expects firms to identify and provide compensation to all consumers due redress and to complete the pensions review on time.
“This is a significant penalty to reflect the serious nature of R&SA's past failings in its handling of the review. R&SA failed in its identification of customers who might have been due redress, it failed to complete review work on time and its management failed to monitor the process effectively.”