Having invested more than £1m in adapting IT systems to cope with insurance industry codes of practice, Scottish Equitable has reverted to manual processing for some pensions products.
As a result, the insurer sent out documents that did not comply with the insurance industry's data quality standard for customer communications.
The Raising Standards initiative was set up in 2001 to improve the clarity and consistency of information provided by insurance companies. To qualify for Raising Standards certification, insurance companies have to ensure the format of all their communications with customers meet strict criteria for accuracy and accessibility.
The Association of British Insurers said businesses had spent between £1m and £3m each complying with the code.
Scottish Equitable has adapted the IT systems behind 24 different products to comply with the Raising Standards scheme, making changes to its IT architecture, business processes and call centre.
Last month it was revealed that some Scottish Equitable customers had been sent non-compliant information after documents about products that follow the Raising Standards scheme were processed manually. The insurer was unable to make the IT platform that administers the product automate the output of customer literature.
"Some systems changes are being specified for section-32 products [the ones with non-compliant information] to better cope with the complexities of taxation," the company said.
Colin Bell, Scottish Equitable's head of business and operational planning, said, "Once we have done that accreditation, it is a case of maintaining it. You are having to check that any tweak you are making to an existing product is not affecting Raising Standards."
As the Raising Standards initiative is voluntary, the most serious sanction a company could face for non-compliance is expulsion from the scheme.