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Prosser pleading L&G&#39s innocence on misselling

Legal & General group chief executive David Prosser has denied to MPs on the Treasury select committee that the company has missold endowments.

Testifying before the committee&#39s investigation into long-term savings on Tuesday this week, Prosser refused to concede that L&G missold endowments.

It emerged separately this week that former Legal & General investment development director John Maguire had an email exchange in 1998 between himself and L&G&#39s then head actuary Mike Bolton in which Bolton questions the viability of L&G&#39s 25-year endowment.

In the email, Bolton says if the views of L&G Investment Management is the “house view, then the viability of a 25-year taxed endowment allowing for expenses must be very doubtful”.

Testifying before the select committee, Prudential group chief executive Jonathan Bloomer said he regrets any misselling the company may have done while Standard Life group chief executive Sandy Crombie said he “holds his hands up” over failing to inf-orm customers about underperforming policies.

Committee chairman John McFall hit out at the life office executives, saying the dice have always been loaded in their favour and the industry is “constantly putting its own interests ahead of consumers”.

L&G says Prosser was not denying there was no misselling of mortgage endowments, only that there has been no systemic misselling.

The firm is preparing to challenge a disciplinary ruling by the FSA that the company was guilty of misselling endowments between 1997 and 1999.

Prosser said: “In looking at the complaints&#39 process, we can see no systemic issues. Even though we will pay out and can go the extra mile to give the benefit of the doubt to the consumer where there is any doubt, we took every step we could to ensure that we processed every complaint. I did not say that we had not made any mistakes.”

Bloomer said: “I very much regret any misselling that we may have done in this case. Obviously, in the longer term it is not in our interest to be in that situation. We have no interest in dealing with appropriate products.”


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