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Aegon insurance arm looks set for FCA fine

Aegon subsidiary Stonebridge International Insurance is likely be fined by the Financial Conduct Authority, Money Marketing understands.

The general insurance firm has been subject to a Section 166 skilled persons report, which checks for weaknesses or failings in a firm’s practices. The regulator orders these reports where it has concerns and firms have to meet the cost of carrying them out.

The fine against Stonebridge is believed to relate to missold insurance products. FCA complaints data shows that between 1 January and 30 June 2013, the regulator opened 735 new complaints against the firm, as well as closing a further 853 cases, 45 per cent of which were upheld. 

On its website, Stonebridge says that between 1 July and 31 December 2013, 650 complaints were reported to the FCA, with 694 cases closed.

A spokeswoman for Aegon UK says: “The FCA completed a Section 166 review into Stonebridge International Insurance Limited and the report was concluded in early 2013.  The business has addressed the action points from the report.”

The spokeswoman adds that ahead of the Section 166 review, Stonebridge was overseen by TransAmerica Life and Pensions, a US insurer owned by Aegon. During the first quarter of 2014, oversight of Stonebridge changed to Aegon UK. 

Aegon said it could not comment further on the nature of the review or any prospective fine.

Stonebridge International Ins-urance declined to comment, as did the FCA.

Highclere Financial Services partner Alan Lakey says: “This raises interesting questions about how a parent company should oversee a subsidiary. Aegon may have chosen to give Stonebridge’s management autonomy to run the business but if things go wrong, it is Aegon’s brand that ends up being tainted.”

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