Combined Insurance Company of America (CICA) has been fined GBP2.8m by the Financial Services Authority (FSA) over unfair treatment of its customers, who were self-employed, small business owners or manual workers.

According to FSA, CICA had sold accident and sickness insurance products through self-employed sales agents during 1 April 2008 to 26 October 2010 and received GBP47m in premiums for the new policies that were sold.

CICA had failed to effectively manage its sales processes, claims handling and complaints handling to ensure its customers were treated fairly thereby breaching FSA Principle 3 (management and control) and Principle 6 (customers’ interests).

Further allegations by FSA include, failure to monitor its claims handling process, focus on quantity rather than quality, no consistent and effective action against sales agents who were subject to customer complaints and no record of information by sales agents when advising customers on the suitability of insurance products.

Enforcement and financial crime acting director Tracey McDermott said that CICA’s failure to recognise the importance of treating its customers fairly had led to creating risk for them.

CICA received a 30% discount on its fine and agreed to review its past business to identify any customer detriment as well as pay redress.