(Adds comment from Legal & General, updates shares)
Oct 17 Britain's financial watchdog has asked
Standard Life Plc to review whether it gave customers in
poor health enough information when it sold them pension
products, the insurer said on Monday.
The Financial Conduct Authority (FCA) has told the firm to
review its sales of annuities sold since July 2008 to see if
customers eligible for higher payouts because of a shorter life
expectancy were properly informed about their entitlement,
Standard Life said in a statement.
The request follows an industry wide review by the FCA,
which on Friday said that a "small number" of insurance firms
could be subject to penalties for their selling practices.
Standard Life said it was not possible to estimate reliably
the level of redress it might have to pay as a result of the
review, but that it had made a provision in its 2015 accounts
for potential customer compensation.
The FCA said on Friday that while it had found no
industry-wide problem of annuity mis-selling, some firms may
have to pay compensation to customers who should have been sold
a different type of annuity -- a form of pension that pays out
In cases where a customer would have been eligible for an
"enhanced annuity", lost income ranged from 120 to 240 pounds
($150-300) a year.
Standard Life, which has been a participant in FCA's review,
said it was possible that the financial impact of any
compensation may be mitigated by its professional indemnity
Standard Life's shares closed down 3.7 percent at 330 pence,
making it the third worst performer in London's FTSE 100
The FCA did not disclose which insurers had taken part in
its industrywide review.
A spokesman for Legal & General said the firm was
"pleased" with the outcome of the review.
Aviva and Prudential, two other major
providers of annuities, did not respond to a request for
(Reporting by Esha Vaish in Bengaluru; and Carolyn Cohn in
London; Editing by Rachel Armstrong, Greg Mahlich)