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Aviva hit with £8.2m fine over outsourcing

10:01 06 October 2016

Chief Executive Officer Aviva UK and Ireland Life Andy Briggs.

Aviva

The insurance giant has been slapped with an £8.2m fine for failing to meet financial rules when outsourcing administration of customers’ assets.

Aviva has accepted the fine from the Financial Conduct Authority (FCA) but said no customers had been affected by the lapse.

The FCA said Aviva Pension Trustees UK and Aviva Wrap UK did not have the right controls in place after outsourcing the administration of its customer assets, meaning the firm was not able to account for all funds at all times.

Mark Steward, the FCA’s director of enforcement and market oversight, said: “Aviva outsourced the administration of client money and external reconciliations in relation to custody assets, but failed to ensure that it had adequate controls and oversight arrangements to effectively control these outsourced activities.”

The FCA said Aviva breached the Client Assets Sourcebook rules between January 1, 2013, and September 2, 2015. These are in place to prevent the loss of assets if a company becomes insolvent.

The insurer was given a 30pc discount to its fine for agreeing to settle from the beginning, meaning it paid £8.2m rather than £11.78m which would otherwise have been required.

Norwich-based Aviva said it had tackled the problems with its UK life adviser platform, adding that had strengthened governance and controls surrounding the administration of customer money on the platform.

Aviva has also carried out a review and recruited a specialist team to focus on oversight of customer money and asset processes.

Andy Briggs, chief executive of Aviva UK Life, apologised and said: “This should not have happened and we are sorry.

“Aviva’s customers have not suffered any loss and there has been no impact on advisers. We have addressed and resolved the issues identified.

“We have made improvements to ensure we have clear oversight of the processes undertaken on the adviser platform, and remain vigilant in our continued monitoring through a dedicated and expert team.”

Have you got a business story? Email doug.faulkner@archant.co.uk

Article source: http://www.edp24.co.uk/business/aviva_hit_with_8_2m_fine_over_outsourcing_1_4724828

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