LONDON (Reuters) – Britain’s markets watchdog has fined the country’s largest insurer Prudential (PRU.L) 24 million pounds ($29.39 million) for failures related to non-advised sales of annuities, it said on Monday.
FILE PHOTO: The logo of British life insurer Prudential is seen on their building in London, Britain March 17, 2019. REUTERS/Simon Dawson
The fine comes after Standard Life Assurance, part of insurer Phoenix Group (PHNX.L), was charged 31 million over the same issue in July.
The FCA said Prudential, which is preparing to spin off its UK business next month, failed to make sure customers were consistently advised that by shopping around they could get a higher rate on their annuities, which pay pensioners a fixed income for life.
Prudential did not always tell customers about enhanced annuities, which pay a higher rate to policyholders with a reduced life expectancy, it said.
“Prudential failed to treat some of its customers, who could have secured a better deal on the open market, fairly,” Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA said.
“These are very serious breaches that caused harm to those customers.”
The fine relates to the period between July 2008 and September 2017, the FCA said, adding that by Sept. 19, 2019, Prudential had offered around 110 million pounds in redress to 17,240 customers.
“We are deeply sorry for the historic failings in our non-advised annuity business and any detriment this has caused our customers,” Prudential said in an emailed statement, adding that it expected to compensate the “vast majority” of affected customers by the end of October.
Prudential’s fine was cut by 30% because it did not dispute the findings, the FCA said.
Prudential shares were little changed on the news and were trading up 1% at 14.89 pounds at 1006 GMT.
Reporting by Carolyn Cohn and Huw Jones; editing by Simon Jessop and Kirsten Donovan