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Review at Colonial

Paul Farrelly
Saturday 02 March 1996 19:02 EST
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LIFE insurance and pensions group Colonial Mutual has started a review of training and sales at several of its former branches, following allegations of malpractice revealed in the Independent on Sunday last week.

The review is understood to have been requested by industry watchdog the Personal Investment Authority, which is ready to contact customers directly if it is not satisfied with Colonial's efforts. However, one former employee last week contacted top regulator, the Securities and Investments Board, in frustration at PIA delays in opening enquiries and relying on Colonial.

The Australian-controlled insurer has 600,000 policies in the UK, with pounds 3bn of funds under management, and is currently bidding to run the privatised Teachers' Pensions Agency.

The allegations, made by several former employees, relate to claims that it sent salesmen out untrained and falsified training records from 1990- 1994.

The fresh allegations involve branches at Wolverhampton and Gateshead, and follow claims originally made by Peter Smith, a former Lincoln manager. Mr Smith is suing Colonial for breach of duty of care after alleged victimisation.

Three Colonial executives last week interviewed Bob Edwards, a former Gateshead trainee, about the branch. They included compliance officer Mike Powell, whose boss, John Anthony, is a leading figure in the industry's Compliance Officers' Discussion Group. Both Mr Powell and Mr Anthony are named in Mr Smith's statement of claim in the High Court action. Colonial denies all Mr Smith's allegations.

q Colonial has pointed out that its Lincoln branch was closed in the summer of 1994. Roger Snell, a former Lincoln trainee, left the branch in January 1994, not January 1995 as reported last week.

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