Thursday, 07 September 2017 08:34

FCA ends one life insurer probe but continues 5 others

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The FCA has closed its investigation into Police Mutual’s fair treatment of long term customers and said no further action will be taken but probes into five other insurers will continue.

The regulator says the investigations into the five other firms, part of the probe into the ‘Fair Treatment of Long-Standing Customers in the Life Insurance sector’, will go on and no decision on action has been taken yet. The companies still being investigated are Scottish Widows, Prudential, Countrywide Assured, Old Mutual and Abbey Life.

An FCA statement said: ”No inferences should be drawn from the closure of the Police Mutual case concerning the continuing investigations. The FCA will update the market when decisions are made regarding the status of the remaining investigations.”

In March 2016 the Financial Conduct Authority announced investigations into six firms as a result of its thematic review into the fair treatment of long-standing customers.

Last year as part of TR16/2: Fair treatment of long-standing customers in the life insurance sector, the FCA said it would look further into the fair treatment of customers after a thematic review into how firms were operating their closed-books and whether they were treating their long-standing customers fairly.

The FCA report set out as draft non-Handbook guidance the actions the regulator believed firms should be taking to treat their customers fairly in the future.

In its Business Plan 2014/15, the watchdog said it had identified “some risks” which could lead to long-standing customers being treated unfairly, such as firms benefitting from customer inertia by keeping them in high-charging, poorly performing products or by cutting costs in a way that was detrimental to customers.

At the time, the FCA said it wanted firms to recognise that long-standing customers may have different characteristics and needs than customers who have recently taken out a new product.

It said at the time: “We want firms to take steps to ensure that all their customers receive fair outcomes, not just those who are most engaged or have had recent dealings with them.”

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