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Fined insurer on fund shortlist

Paul Farrelly
Sunday 03 December 1995 00:02 GMT
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AN Australian-owned insurer, fined by regulators two years ago for mis-selling policies, is a leading contender to run the pension fund of 1.1 million teachers.

To trade union concern, the insurer, Colonial Mutual, is one of six firms shortlisted to run the pounds 4.4bn Teachers Superannuation Fund in a contract worth up to pounds 15m a year. The other firms on the shortlist are Abbey National Benefit Consultants, Capita Group, CSL Group, Hartshead Solway and ITnet

Colonial Mutual is currently embroiled in further controversy over a "whistle blowing" case involving an employee, who claimed he was victimised for exposing further malpractice after the fine.

The group has until Wednesday to serve its defence to a writ by Peter Smith, former manager of its Nottingham branch, alleging breach of duty of care over the alleged victimisation.

Mr Smith reported regulatory breaches in training of salesmen at Colonial's Lincoln office, nine months after the firm had been fined pounds 130,000 by Lautro,

Two Lincoln managers were sacked after an internal investigation, but Mr Smith - who left the firm in July 1994 - alleges harassment caused stress and a near mental breakdown.

A subsequent review by Lautro, now superseded by the Personal Investment Authority, came to nothing. Colonial sources say they deny the allegations and will defend Mr Smith's writ.

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