Royal Liver has been fined £550,000 by the Financial Services Authority and is paying out around £7 million in compensation for misselling with-profits savings policies to thousands of customers approaching retirement.
The Financial Services Authority have said that Royal Liver have been selling endowment policies to customers over the age of 59 who had no need for life cover. The policies were projected to pay back less than the premiums paid in.
Royal Liver has refunded £2,245,000 in premiums and £246,000 in lost interest to 2,342 customers who chose to receive compensation, out of 3,154 affected. They have also refunded £3.5 million in premiums and £1 million in interest to customers over 60 that were sold policies between 1993 and 1999, outside the Financial Services Authorities jurisdiction.
The regulator's investigation found failings in the providers sales team between 1999 and 2003, before the relevant contracts were withdrawn in 2004, including inadequate fact finds for customers.
Our view
It is difficult for us to comment not knowing the facts. We are sure the regulator will not have levied such a large fine without due cause.