Royal Liver Fined
Royal Liver, the Liverpool-based mutual life insurer, has been fined £550K by the Financial Services Authority (FSA) who judged it to be guilty of mis-selling with-profits savings policies to thousands of its elderly customers.
The policies were bundled together with life insurance contracts, which were not suitable for the majority of customers.
Some customers ended up getting back less from their policies than they had put in!
Margaret Cole, the 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.
The failings were systemic and arose from weaknesses in the firm's sales and compliance processes and persisted over a long period of time. Firms must make sure that they take account of all products which may be suitable when making a recommendation."
Royal Liver said in a statement:
"The relevant contracts were withdrawn in the UK in 2004 and all policyholders affected have been contacted and offered a full refund of premiums plus interest at an appropriate rate.
Royal Liver has worked closely with the FSA on this issue to ensure that the appropriate lessons have been learned and controls have been strengthened as a result."
Is it any wonder people don't trust the life assurance industry?