AXA Sun Life was fined £500,000 yesterday for misleading advertisements - some featuring television personalities Carol Smillie and June Whitfield.
The Financial Services Authority (FSA) imposed the fine after an investigation into advertisements for two Axa products, an endowment policy and a life policy, which were judged misleading and incorrect.
About 200,000 people who bought one of the two products featured will be given the option to cancel their policy and receive a full refund of premiums, plus interest, the FSA said.
The advertisements were part of a media campaign between February 2002 and January this year, which included direct-offer promotions.
The advertisements did not provide customers with sufficient information about how the products worked or the risks involved, and some included comparative data that was incorrect, the FSA said.
The breaches were compounded by the company's failure to promptly inform the FSA of its mistake, the watchdog said.
AXA Sun Life apologised to customers and the FSA for the advertisement.
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