FCA to investigate life insurance firms
The Financial Conduct Authority has started an investigation into six life insurance firms, after they finished their report about how long-standing life insurance customers are being treated. In the words of acting CEO Tracey McDermott, it looks like "the practices at some firms appear to have been poor."
Hardly the strongest of language, but it isn't good news for Abbey Life, Countrywide, Old Mutual, Police Mutual, Prudential and Scottish Widows, who are now in the FCA's crosshairs. All these companies will have their practices looked at, as far back as 2008.
Old Mutual and Abbey Life are going to find themselves under the microscope as part of a broader investigation.
The FCA say: "These investigations have been commenced in order to enable the FCA to establish the reasons for the practices within firms; whether customers have suffered detriment as a result and how widespread any practices are within the six firms. No conclusion has been reached as to whether there have been any breaches of regulatory requirements. The commencement of investigations should therefore not be taken to indicate that they will necessarily result in disciplinary action against the firms involved nor does it indicate that a penalty will inevitably be imposed or that redress will be payable."
So, no-one should jump to any conclusions just yet, but this still isn't great news for the firms involved. The report that the FCA has published today wanted to determine whether or not customers were getting "clear and timely communications" about policy features, and if customers can switch products easily.
The FCA found that there's issues with six firms’ communication with customers when they requested to surrender or transfer a policy. The concern is that customers may not have been aware that fees could apply in some instances, which means there needs to be an investigation to see if anyone has been doing anything wrong. It could lead to fines.