U.K. Regulator Opens Investigation Into Six Insurers

LONDON—The U.K.'s Financial Conduct Authority said Thursday it has launched a probe into six insurance firms on concerns that they failed to inform customers of fees that were imposed.

The investigation into the insurers—Abbey Life Assurance Company Ltd., Countrywide Assured PLC, Old Mutual Wealth Life Assurance Ltd., Police Mutual Assurance Society Ltd., Prudential PLC and Scottish Widows PLC—comes as the regulator draws to a close a review into fair treatment of long-standing customers of life-insurance companies.

The FCA is focusing on fees charged to customers. "The six firms may have failed to inform customers of these charges at the time they were incurred," it said.

The regulator is also investigating Abbey Life and Old Mutual over whether they breached regulatory requirements over communications about policy features, product switches and whether they took proper account of fund performance.

The FCA noted it wasn't possible at this stage to draw any firm conclusions, nor was it inevitable any fines or penalties would occur.

However, it is now planning an industry review into capping or removing fees that customers pay when exiting insurance products.

Scottish Widows said it was cooperating fully with the FCA. "We regularly review our approach to ensure we do the right thing for customers and will continue to do so," it said.

Spokesmen for Prudential and Old Mutual said the companies were cooperating with the FCA.

Neither Countrywide nor Abbey Life could be reached for comment. Police Mutual didn't respond to requests for comment.

The new probe comes almost two years after the FCA released details on an insurance probe to a journalist at the Daily Telegraph, causing insurance shares to drop sharply.

Then FCA chief Martin Wheatley told the Treasury Select Committee that the regulator "screwed up."

This time, shares are relatively unmoved. Old Mutual shares were down slightly, while Prudential was flat.

Write to Giles Turner at [e-mail]

(END) Dow Jones Newswires

March 03, 2016 07:35 ET (12:35 GMT)

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