IAG's Hastings fined over cancelled policies

Mon Jul 28, 2008 12:58pm BST

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LONDON (Reuters) - The Financial Services Authority (FSA) fined motor insurer Hastings, a unit of Insurance Australia Group (IAG.AX), 735,000 pounds over failings linked to hundreds of incorrectly priced policies.

The FSA said on Monday Hastings had failed to treat customers fairly when it cancelled around 4,550 car insurance policies after an internal error gave customers inaccurate quotes and had some paying lower premiums.

The FSA said the company failed to consider other possible remedies and found shortfalls in its service to customers.

By agreeing to settle early, Hastings cut a fine that would otherwise have topped 1 million pounds.

IAG, Australia's biggest home and car insurer, said earlier this month it would scale back its operations in the cut-throat UK motor market. It is expected by analysts to sell Hastings, which it bought in 2006 as part of a UK push under former chief executive Michael Hawker, who resigned earlier this year.

(Reporting by Clara Ferreira-Marques; Editing by David Holmes)

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