The Daily Telegraph newspaper said today that Lloyds Banking Group PLC will strip five current and former senior bankers of more than 1 million pounds in bonuses for their role in a scandal involving insurance that was sold to borrowers, Reuters reported.

The bank is taking back the bonuses after being forced to set aside 3.2 billion pounds last year to cover compensation claims filed by borrowers, the newspaper said.

The bonus withdrawal will be the first time a British bank has exercised a “clawback” option on executive pay packages since the financial crisis, the newspaper said. Payment-protection insurance (PPI) often was sold alongside loans to cover repayments if borrowers fell ill or lost their jobs.

The product was labeled as worthless insurance for many customers by a British consumer group in 2008, which followed compensation claims by buyers.

In April 2011, the industry lost a case in the British High Court to stop customers from demanding compensation. Lloyds announced weeks after the decision that it would set aside 3.2 billion for payouts.

Lloyds could not be reached for immediate comment, Reuters said.