LONDON (Bloomberg) — A UK unit of American International Group Inc., the world's largest insurer by assets, was fined £640,000 ($1.26 million) by the Financial Services Authority for poor oversight of its call centres.

AIG's UNAT Direct unit didn't conduct enough research before call centres tried to sell insurance products such as personal accident policies to consumers, the FSA said in a statement yesterday.

The way financial services companies sell products, and record those sales, has come under FSA scrutiny. Last week, AXA SA's Thinc Group received a £900,000 fine for failing to show that consumers' credit histories merited the sale of 775 sub-prime mortgages.

"Selling general insurance products to consumers through call centers involves greater risk," said Margaret Cole, the FSA's enforcement director yesterday in a statement.

"The FSA will impose significant fines on general insurance firms whose management of call-centre risks falls below acceptable standards."

UNAT cooperated with the FSA to address the problems in return for a 20 percent discount on the fine, the FSA said.