The FSA has fined Scottish Amicable £750,000 for endowment misselling between January and December 2000.
Following the intervention by the regulator, ScotAm - now owned by Prudential - has reviewed 33,781 policies and set aside £11m for redress. The FSA found that ScotAm's advisers did makes customers sufficiently aware of the risk that the endowment might not pay off the mortgage.
Prudential spokesman Darragh Leeson says: "The shortcomings in our procedures were identified in January 2001 and immediately rectified to the satisfaction of the Regulator. We have co-operated openly and fully with this review and we accept the fine imposed.
"We can confirm that shareholders and not policyholders will pay the fine."