Standard Life Assurance Limited (SLAL) has been fined in excess of £30 million by the Financial Conduct Authority (FCA).
SLAL, which last year came under the umbrella of Phoenix Group Holdings, is being penalised for failures related to non-advised sales of annuities from July 2008 to May 2016. FCA’s probe found that the company failed to put in place adequate controls to monitor the quality of the calls between its call handlers and non-advised customers.
According to the regulator, SLAL also offered its front-line workers sizeable rewards to sell annuities which brought about a significant risk that call handlers would compromise customers’ interests by prioritising their own.
“Standard Life Assurance Limited’s controls needed to place fairness to customers at their heart,” said Mark Steward, executive director of enforcement and market oversight at the FCA.
“Here, the financial incentives available to staff for selling non-advised annuities by telephone created conflicts which led to unfair outcomes for some customers.”
Following the penalty announcement, the previous owner of the business issued a statement.
“Neither Standard Life Aberdeen Plc, nor any of the companies currently within the group, is the subject of this investigation,” declared SLAL’s former parent, while citing its full cooperation with the regulator since the start of the probe in 2016.
“However, we recognise these failures happened while SLAL was part of Standard Life Plc, which subsequently became Standard Life Aberdeen Plc, and we are sorry for the impact this had on some customers.”
Standard Life Aberdeen added: “Working with the FCA, SLAL initiated a past business review, which is ongoing under Phoenix Group ownership, to redress those customers which the review determines have been impacted by the issues identified.
“SLAL has confirmed that all customers affected have been contacted to begin their annuity review and over 80% of cases have been resolved. The customer remediation programme continues to progress well and is expected to be complete by the end of this year.”
Meanwhile the original fine stood at nearly £44 million. The amount was reduced by 30% to almost £31 million after SLAL agreed to accept or not dispute the findings of the FCA.
