Insurance and investment firm Standard Life will abide by the orders of the Financial Conduct Authority (FCA) to evaluate its non-advised annuity sales for the past eight years.
The insurer said on Monday that it had participated in an industry-wide review by the FCA, which recently warned that a “small number” of insurance firms could be slapped with penalties for their selling practices.
“At the request of the FCA, Standard Life will conduct a review of all non-advised annuity sales from July 2008 to identify whether our customers received sufficient information about enhanced annuities to make the right decisions about their purchase,” the company said in a statement.
The FCA review aims to determine if firms made customers aware of their potential eligibility for enhanced annuities and whether they encouraged clients to shop around in order to get a higher income from another provider.
The watchdog, which published the review findings on October 14, said that there was no evidence of an industry-wide or systemic failure to provide customers with sufficient information about enhanced annuities through non-advised sales.
However, the regulator was concerned about the oral communications of some firms with their clients. The FCA said this may have caused customers to purchase a standard annuity when they could have been eligible for an enhanced annuity.
The FCA asked the firms, including Standard Life, to review their previous sales and provide redress if needed. It also threatened further regulatory action following an ongoing investigation.
Standard Life said it was not yet possible to estimate reliably the level of redress it might have to pay as a result of the review. The insurer pointed out, however, that it had made a provision for potential customer compensation in its 2015 financial report.
The insurer said the financial impact of any compensation may be mitigated by its professional indemnity insurance.
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