Reuters report that the Financial Services Authority (FSA) has issued a warning to life insurers, that they may be underestimating their liabilities due to poor record keeping.
That's not very encouraging news, is it?
It seems that the FSA's investigation, into the working practices of with profits life assurers, has identified that most firms do not review whether their obligations (ie what they owe you, the policy holder) were being met.
I would ask the question here, what the hell are these companies doing then?
It seems to me that this would be a fundamental procedure; after all, if you don't know as to whether you have met past obligations how the hell do you know if you will be able to meet future ones?
Additionally, it seems that some firms no longer have the key original documents; outlining their obligations, for some products.
Those of us who have been battling to receive compensation, for our hopelessly underperforming and useless endowment policies, can certainly attest to this problem. My earlier claim hit the buffers, partly because key paperwork had long since been disposed of.
Even more alarmingly, it seems that some smaller firms have been drafting contracts for new products without any legal input or review.
Excuse me, but I thought that we lived in a modern Western country with laws and regulations? These companies seem to be operating in a manner more akin to those tin pot operations based in Nigeria who, via unsolicited emails, offer vast sums in exchange for your bank details and a fee (See the Stupid Punts section of my site for examples of these scams).
The good news is that the FSA want life assurers to review their procedures, and report back by 30 November.
That's alright then, isn't it?