The Financial Services Authority (FSA) has fined Scottish Equitable £2.8m for causing significant consumer detriment through poor administrative procedures. Scottish Equitable will pay consumer redress of about £60 million, of which £30 million will have been paid by the end of 2010.
In 2009, Scottish Equitable Plc informed the FSA that it had identified around 300 issues relating to problems in administering its policies. These problems included not issuing 238,000 policyholder documents.
Margaret Col for the says, “This case shows the importance of getting customer administrative procedures right and fixing them quickly when they go wrong. This is a key part of treating customers fairly. By letting the issues build up over such a long period Scottish Equitable made it even more difficult to fix the problems and this led to delays in getting compensation to customers.”
Scottish Equitable qualified for a 30% discount under the FSA’s settlement discount scheme. Without the discount the fine would have been £4m. The FSA has taken into account that Scottish Equitable co-operated with the FSA and has committed substantial resources and time to rectifying the issues identified.
Life insurance news: 30 December 2010