BBC News Online: Business

Pru fined over pension mis-selling

Prudential failed to keep proper records

The UK's financial watchdog, the Personal Investment Authority, fined the Pru £650,000 because it had "failed to progress the review of priority cases in a timely manner".

The Pru had failed to make prompt compensation payments to boost payouts to policy holders who had already retired.

The insurer had also failed to speed up supplementary pay to beneficiaries of policy holders who had died, the watchdog said.

Sometimes, it would take the Pru up to six months to review a case. This was unacceptable, the authority said.

Since 1994, the watchdog has taken disciplinary action against 340 firms for failure to comply with the pensions review process, but never before has a fine this large been handed out.

No records

The Pru had failed to keep records of many of the cases investigated by the watchdog.

In some cases, the insurer was unable to uncover any documentation at all.

In other cases, it had to dig the files out from third parties' cabinets.

This made it hard for the Pru to justify its actions in relation to the pensioners and their relatives.