Record Fine For Data Loss
August 26, 2010
The UK operation of Zurich Insurance has been fined £2.27m by the Financial Services Authority (FSA) for losing personal details of 46,000 customers.
It is the highest fine levied on a single firm for data security failings.
Margaret Cole, the FSA’s director of enforcement and financial crime, said: “Zurich UK let its customers down badly.” Stephen Lewis, chief executive of Zurich UK, said: “This incident was unacceptable.”
The FSA says the loss could have led to serious financial detriment for customers and even exposed them to the risk of burglary.
Zurich UK outsourced the processing of some of its general insurance customer data to Zurich Insurance Company South Africa Limited. In August 2008, Zurich SA lost an unencrypted back-up tape during transfer to a data storage centre but Zurich UK did not learn of the incident until a year later.
By agreeing to settle at an early stage, Zurich received a 30 per cent discount on what would have been a fine of £3.25m.
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