Zurich Insurance is Fined by UK FSA

August 25 - Zurich Insurance PLC, the UK unit of the global Zurich Insurance Group, was fined a record amount by the Financial Services Authority for not protecting the personal details of millions of its clients.

Last year, it was reported that the details of millions of South African and UK clients were in danger after a back up tape went missing during a transfer to a storage center in South Africa.

While the data went missing in 2008, Zurich Insurance only discovered the incident a year later.

Steps were immediately taken to ensure that the information was not misused and letters were sent to all those clients who were affected.

The FSA said that although there was no evidence that the information was used in any fraudulent way, it was shown that Zurich Insurance did not take the necessary steps to ensure that tough security was in place at all times.

As such, the FSA fined the insurance giant the biggest amount in the history of the industry - a whopping $3.54 million.

This amount was determined after a 30% discount was given for settling the fine at an early stage.

It is believed that the FSA insisted on such a high fine because it wanted to ensure that other insurance groups took necessary steps to protect their own customers.

"Firms across the financial sector would do well to look at the details of this case and learn from the mistakes that Zurich UK made," said the FSA.

Zurich Insurance said in its own statement: "This incident was unacceptable. It served to remind us the need to strive continually to improve the ways in which we seek to protect customers' data."

"We believe our customers can be confident that we are doing everything we can to keep their data secure and protected," added the group.