FCA closes fees probe into life insurers

FCA closes fees probe into life insurers

The Financial Conduct Authority has closed its investigation into four closed book life insurance companies without taking any enforcement action.

The regulator had been investigating Abbey Life, OId Mutual, Prudential and Countrywide since March 2016, when it completed a thematic review which found a lack of transparency around fees.

While the thematic review covered 11 firms, the FCA judged further investigative work was needed to establish whether six of these companies had failed to meet the regulator's standards.

Article continues after advert

The investigations into Police Mutual and Scottish Widows had already been closed without further action, and this morning the FCA revealed the other four probes had also been closed.

In a statement, the regulator said: "The FCA found the conduct of the four remaining firms [...] did not warrant enforcement action.

"In each firm, some issues have been identified during the investigations, which are being addressed as part of our ongoing supervision of those firms."

The FCA published guidance in December 2016 which said life insurance firms should treat their closed-book customers fairly, including when disclosing the existence of paid-up and exit charges to existing customers.

In its original thematic review, the FCA found that even where customers are aware of these charges, the impact on the returns customers receive can be significant, and they may present barriers to customers shopping around.

The FCA was concerned the six firms may have failed to inform customers of their charges at the time they were incurred.