The FSA has slapped a £500,000 fine on Winterthur Life for misselling mortgage endow-ment policies, the first time a product provider has been penalised for the offence.
The fine, the FSA's fourth-biggest, relates to around 10,000 mortgage endowment policies sold between March 1998 and December 1999 through a computerised point-of-sale system which was recommending that risk-averse clients take out endowment mortgages.
The company, which pulled out of the endowment market in July 2000, has been forced to put aside around £10m to compensate policyholders, the exact number of which it says is being determined by an external firm.
Winterthur is contacting policyholders it is certain have been missold an endowment and pledges to compensate clients who have already surrendered their policy.
The FSA says more ann-ouncements are in the pipeline as it is dealing with a number of other firms where misselling has been identified.
FSA managing director for regulatory processes and risk Carol Sergeant says: “This is further delivery on our commitment to deal effectively with endowment misselling. Where consumers have suffered loss we want to see firms quickly and decisively put things right. The level of fine here reflects the fact that Winterthur has dealt with the problem quickly, openly and cooperatively.”
Winterthur Life chief executive officer Clifton Melvin says: “We very much regret this has happened and our first aim is to make sure that none of our policyholders are financially disadvantaged by this.”