Life insurance policyholders may benefit from crime initiative

Wed, 07 Mar 2007

Life insurance customers may be set to benefit after the Financial Services Authority announced a new initiative to tackle fraudulent activity across the insurance industry.

Under the scheme, any insurance firm that suspects a rival insurance specialist is engaged in nefarious activities has been urged to contact the Financial Services Authority.

When making contact, the insurance company will be asked to provide information including the name of the suspect firm and particular individuals, as well as evidence of the crime and names of any customers who may have been affected by the activity.

This raises the prospect that life insurance policyholders affected by fraud could be more likely to receive an apology or compensation.

"We want to know when a firm has suspicion or evidence of malpractice," commented Stephen Bland, director of small firms at the Financial Services Authority.

"We hope that by sharing intelligence in this way, we can work together to reduce financial crime."

Meanwhile, Nick Starling, director of general insurance and health at the Association of British Insurers urged members to support the Financial Services Authority in its latest effort to crack down on malpractice.

If the new initiative is successful at cracking down on criminal insurance activity, it could potentially have a knock-on effect upon life insurance premiums.

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