LONDON: Shares in British insurers slumped yesterday as regulators revealed plans for a review of charges and restrictions on 30 million policies sold between the 1970s and 2000.
The Financial Conduct Authority (FCA) will launch a probe into the fair treatment of long-standing life insurance customers on Monday, alongside publication of its business plan, the regulator confirmed in a statement.
The FCA will investigate the treatment of customers who took out products worth £150bn ($250bn), including private pensions, endowments, investment bonds and life insurance, over the 30-year period.
The news sent top insurance firms tumbling, with Resolution plunging 7.36 percent to 295.5 pence, Aviva diving 4.90 percent to 459.8 pence and Legal & General down 3.85 percent to 204.2 pence.
Prudential dropped 2.97 percent to 1,276 pence and Standard Life lost 2.05 percent to 378.4 pence on London’s FTSE 100 index, which was down 0.60 percent at 6,628.28 points in afternoon deals.
“The work on fair treatment of long standing customers in life insurance is a supervisory piece of work. We enter into this work to gain a better understanding of how this area functions,” the FCA said in the statement. “We will be looking at how people in closed accounts are being treated.
“These accounts have been closed for many years in some cases, but there are still valid issues to be looked at around the question of the service that consumers receive in relation to those accounts. Are they getting the right information? Are they getting the right level of service? Are these investments still appropriate?”
AFP
