Royal Liver Assurance fined £550,000 for mis-selling policies |
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Published
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Mon, 10 Apr 2006 15:30
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LONDON: Britain's regulator Financial Services Authority has imposed a fine of 550,000 pounds on Royal Liver Assurance for mis-selling its with-profits savings policies to customers who did not actually require such policies.
The FSA charged that the mutual insurer sold policies, which contained life insurance component, to people who had no need for life cover or for whom the life cover was not suitable. It said thousands of customers, who were nearing their retirement and who wanted general savings policies, were sold policies that could pay back less than the total value of the premiums they had paid, said the FSA in a statement.
Margaret Cole, FSA's director of enforcement said, "This was a serious case of mis-selling, particularly as a significant number of Royal Liver Assurance's customers were nearing retirement age and did not need the cover they were sold."
She said the failings were systemic and were results of weaknesses in the firm's sales and compliance processes and persisted over a long period of time"
Royal Liver offers life assurance, savings and pensions. It had sold nearly 28,000 with-profits savings policies during the period which was investigated by the FSA -- July 1, 1999 to September 15, 2003 -- and 3,569 of these were to people aged 60 and over.
The FSA acknowledged in a separate statement that the insurer had cooperated in the probe and had decided not to appeal against the fine. It had refunded premiums to 2,342 customers totalling 2.24 million pounds together with interest of 246,000 pounds.
With-profits policies are intended to pay bonuses to policyholders using some of the returns in good investments years to keep up payments when the markets fall.
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