UNAT DIRECT pays £640,000 for premature call centre sales

Incomplete due diligence on external call centres contracted to sell general insurance products has cost UNAT DIRECT Insurance, a subsidiary of AIG Inc, £640,000. The FSA penalty relates to non-adherence by the firm to its own Third Party Management (TPM) policy between 14 January 2005 and 22 March 2007. Despite clear stipulation that “Gaps in the control environment must be addressed prior to the commencement of a business relationship”, eight of the nine call centres that UNAT appointed in the relevant period began to sell policies before they had been fully assessed. Telemarketing should have been instructed not to begin sales until final sign-off on the due diligence but this was not required. In the worst case, the due diligence was not finished 250 days after selling had begun.