Stonebridge, part of international insurer Aegon Group, tried to maximise sales by using tactics such as making it hard for customers to cancel policies despite attempts over several years by some, the Financial Conduct Authority (FCA) said on Thursday.

Stonebridge, which agreed to settle early with the FCA to avoid a 12 million pound fine, said it acknowledged the watchdog's findings and that it remained a solvent trading company which will continue to service its clients as usual.

The FCA said the company, authorised by UK regulators since 2001, had voluntarily stopped selling the products in question, replaced top executives and changed how it was run.

Between April 2011 and December 2012, Stonebridge targeted low- and middle-income customers without college degrees or professional qualifications, with its personal accident, accidental death and accidental cash plan insurance products, the watchdog said.

"Outsourcing companies sold policies over the telephone, with those responsible for sales, encouraging people to buy more expensive products, whilst companies responsible for post-sale support actively discouraged customers from cancelling their policies," the watchdog said.

The policies worth 94 million pounds were sold over the phone to customers in Britain, Germany, France, Italy and Spain, with lists of potential customers provided by Stonebridge's business partners, including catalogue sales firms, online retailers, banks and credit card companies.

In return the partners received a percentage of the monthly premiums, which ranged from six to 13 pounds.

Stonebridge had initially rejected the FCA's concerns.

But a review by an independent law firm, commissioned by Stonebridge, found that 486,444 customers across the European Union could be affected. The company has already paid out 400,000 pounds in compensation.

The FCA also forced Stonebridge to pay another outside firm to conduct a more detailed study that found customers had been given inaccurate or misleading information about policies.

"Customers are entitled to expect firms to provide them with fair and balanced information to enable them to make the right choices about the product that is right for them," FCA director of enforcement, Tracey McDermott, said.

"Stonebridge failed to do this and, when customers tried to cancel, put up barriers to prevent them from doing so," she said.

One customer had unsuccessfully tried to cancel his policy since 2004.

(Reporting by Huw Jones; Editing by Erica Billingham)

By Huw Jones