Six life insurance providers have been referred to enforcement over closed-book failures by the Financial Conduct Authority.
The firms involved are Abbey Life, Countrywide, Old Mutual, Police Mutual, Prudential and Scottish Widows.
The FCA says: “These investigations have been commenced in order to enable the FCA to establish the reasons for the practices within firms; whether customers have suffered detriment as a result and how widespread any practices are within the six firms. No conclusion has been reached as to whether there have been any breaches of regulatory requirements.
“The commencement of investigations should therefore not be taken to indicate that they will necessarily result in disciplinary action against the firms involved nor does it indicate that a penalty will inevitably be imposed or that redress will be payable.”
The FCA states in the report published today looking at how long-standing customers are treated that firms should provide “clear and timely communications” about policy features, as well as looking into whether it is easy for customers to switch from one product to another.
The FCA says: “We had identified some risks which could lead to long-standing customers being treated unfairly, such as firms benefitting from customer inertia by keeping them in high-charging, poorly performing products or by cutting costs in a way that was detrimental to customers.”