Zurich Insurance unit handed record British fine: regulator

24th August 2010, Comments 0 comments

A British regulator on Tuesday said it had fined the UK division of Swiss group Zurich Insurance more than two million pounds for losing customers' data -- a record amount for such an offence.

The penalty of 2.275 million pounds (2.776 million euros, 3.507 million dollars) is for the loss two years ago of personal details belonging to 46,000 customers signed up with Zurich UK, the Financial Services Authority said in a statement.

"The FSA has fined the UK branch of Zurich Insurance Plc ... for failing to have adequate systems and controls in place to prevent the loss of customers' confidential information," it said.

"The fine is the highest levied to date (by the FSA) on a single firm for data security failings."

Zurich Insurance's South African division misplaced a disc containing the details of Zurich UK customers in August 2008, but the error was not discovered until one year later, according to the FSA.

The crucial data included personal information, including bank account and credit card details, as well as insurance policy and security information.

"Zurich UK let its customers down badly," said Margaret Cole, the FSA's director of enforcement and financial crime.

"It failed to oversee the outsourcing arrangement effectively and did not have full control over the data being processed by Zurich SA.

"To make matters worse, Zurich UK was oblivious to the data loss incident until a year later."

Zurich agreed to settle with the FSA at an early stage and qualified for a 30 percent discount on the fine. The group would otherwise have faced a larger penalty of 3.25 million pounds.

Zurich Insurance is a division of Zurich Financial Services (ZFS).

© 2010 AFP

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