By Lindsay Fortado and Kevin Crowley
(Adds RBS sale details from first paragraph.)
Jan. 18 (Bloomberg) -- Royal Bank of Scotland Group Plc was fined 2.17 million pounds ($3.3 million) after its insurance units, which the bank is planning to sell, altered complaint forms before showing them to the U.K.?s finance regulator.
Managers at Direct Line Insurance Plc and Churchill Insurance Co. failed to prevent employees from changing 27 of 50 closed customer-complaint forms before they were sent to the Financial Services Authority, which had requested them, the regulator said in a statement today.
?This is a serious breach,? said Tracey McDermott, the FSA?s acting head of enforcement. ?The firms failed to give clear instructions resulting in staff making inappropriate alterations, with one individual even forging the signatures of colleagues. The firms? management did not know what changes had been made or when.?
RBS, the U.K.?s biggest home and motor insurer, has been given until the end of this year to sell its insurance business by the European Union in return for receiving a 45.5 billion- pound government bailout in 2008 and 2009. The division, which is planning an initial public offering, reported a profit last year after posting a loss in 2010 because of surging personal injury claims.
U.K. Insurance Ltd., the general insurance underwriter of RBS Insurance that owns Direct Line and Churchill, cooperated with the FSA and received the regulator?s standard 30 percent discount for settling early.
?We very much regret the findings of the FSA investigation,? RBS Insurance Chief Executive Officer Paul Geddes said in a statement. ?Since becoming aware of this issue well over a year ago, we have taken action to address these issues and to ensure we avoid such breaches in the future.?
--Editors: Christopher Scinta, Steve Bailey
To contact the reporters on this story: Lindsay Fortado in London at lfortado@bloomberg.net; Kevin Crowley in London at kcrowley1@bloomberg.net
To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net
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