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FSA fines Sun Life Assurance Company of Canada £600k

FSA Front 480

The FSA has fined Sun Life Assurance Company of Canada (UK) £600,000 for failings in the governance of its with-profits business.

The company trades under the name Sun Life Financial of Canada.

The failings emerged following two significant transactions the company carried out in 2008 and 2009. The transactions impacted upon one of SLOC UK’s with-profits funds, holding approximately 114,000 policies and £1.2bn in assets.

SLOC UK’s with-profits committee failed to adequately review these transactions, while its board of directors did not approve the transactions. The FSA has not criticised the transactions themselves, but says the review and approval process followed by SLOC UK was deficient. It says this led to an unacceptable risk that proper independent judgement would not be applied to the transactions.

FSA director of enforcement Tracey McDermott says: “It is essential insurers operating with-profits funds ensure policyholders are properly protected.

“The firm fell below the standard required. Its with-profits committee and board, who had primary responsibility for the fair treatment of policyholders, were not adequately consulted on two significant transactions. This was an unacceptable approach to protecting policyholders.”

The FSA sent a Dear CEO letter to with-profits firms in September 2007, which highlighted the need for governance arrangements to include independent challenge of decisions concerning policyholders. The regulator carried out a review of the with-profits sector in June 2010 and published a policy statement on protecting with-profits policyholders in March this year.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Be even better if they actually complete their study into the merits of open with profits funds with zombie funds and this time come to a conclusion.

  2. Hello Playmates!

    Clearly, the FSA does not know that Sun Life of Canada’s vaults were used to house the UK gold reserves during WWII. That was before those twin imposters, Over-regulation and Bureaucracy reared their ugly heads.

    Now the FSA is fining SLOC for a minor infringement that resulted in no detriment to clients.

    Regulation drove SLOC out of the UK (they’re thriving in other territories, as are their policyholders) and now the FSA wants to add detriment to UK clients of SLOC (who were already cut off from access to their trusted adviser by over-regulation) by fining the company.

    It is the policyholders who will be paying the fine, not SLOC.

    Where will the FSA madness lead next?

    Love and kisses

    Larrykins xxxx

  3. RegulatorSaurusRex 18th October 2012 at 3:27 pm

    I’m extinct and I stink.

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