Standard Life has confirmed it will review all of its non-advised annuity sales from July 2008 onward following an FCA request.
Last week, the regulator said it conducted a review of 1200 non-advised sales at seven firms. The review related to concerns annuity providers were failing to inform customers they may be entitled to a higher rate of income through an enhanced annuity.
The FCA did not find industry-wide failure but said a “small number” of firms were being investigated by its enforcement team.
In a statement released today, Standard Life says: “At the request of the FCA, Standard Life will conduct a review of all non-advised annuity sales from July 2008 to identify whether our customers received sufficient information about enhanced annuities to make the right decisions about their purchase.”
The statement adds that Standard Life is unable to give a reliable estimate of how much compensation it could have to pay out, but that the financial hit could be covered by its professional indemnity insurance.
In its 2015 accounts, Standard Life set aside a contingent liability for compensating customers after the enhanced annuity review. However, it was also not able to place a value on how much it would set aside.
The accounts say: “The outcome and consequences of our further analysis and the FCA review are uncertain but it is possible that, for relevant components of our annuity population, these consequences could include requirements to compensate customers who could have obtained a more favourable annuity rate.
“Ahead of Standard Life completing further analysis and learning the outcome of the FCA’s review, it is not practicable to determine an estimate of the financial effect of this contingent liability.”