FCA issues penalty
Standard Life Assurance fined £31m over annuity failures
Standard Life Assurance now part of Phoenix
Standard Life Assurance has been fined £30.8 million for failing to provide customers with appropriate information about enhanced annuities, including the option to shop around for a better deal.
The Financial Conduct imposed the penalty following the outcome of its industry-wide annuity review. The action relates to Standard Life Assurance’s non-advised telephony practices for customers who may have been entitled to an enhanced annuity during the period 1 July 2008 to 31 May 2016.
The business is now owned by Phoenix after its acquisition of the life businesses from Standard Life Aberdeen last year. At the time of the acquisition this was a known issue and an indemnity was put in place to cover the costs of the enforcement action and associated fees. Accounting provisions had also been made and declared previously to redress those customers who had been impacted.
Susan McInnes, CEO of Standard Life Assurance and Phoenix Group Director, Open Business, said: “While this is an historic issue and one we were aware of when we acquired Standard Life Assurance Limited, we would like to apologise to affected customers, all of whom we have already been in contact with as part of the programme of customer redress. We have also reviewed and updated our telephone practices as part of this process.
“Whenever we get things wrong, we seek to learn from our mistakes and are absolutely focused on putting things right. Our remediation programme for affected customers is progressing well and we expect it to be completed by the end of the year.”
· FCA Review: In 2016 the FCA asked a number of firms to carry out a review relating to the sale of enhanced annuities.
· Subsequently the FCA’s Enforcement Division began investigating those firms to see if any further action was necessary.
· Review and Redress: Standard Life Assurance Limited initiated a review and redress programme in 2016 and has been working with the FCA to put things right for those customers who may have been impacted. 80,000 customers were potentially impacted and an outcome has already been reached for over 80% of them. Customer engagement with the review has been high and provisions have been made for redress.
· Indemnity: When Standard Life Assurance Limited was acquired by Phoenix in 2018 a capped deed of indemnity was put in place with Standard Life Aberdeen to cover potential enforcement action and associated fees.