The U.K.'s Financial Conduct Authority has fined Prudential PLC's Prudential Assurance Co. Ltd. £23.9 million for failures relating to non-advised annuities sales between July 2008 and September 2017.
The regulator said Prudential had failed to ensure that customers were consistently informed that they could get a better deal on an annuity by shopping around. The life insurer also failed to take reasonable care to organize and control its affairs and to ensure documentation used by call handlers was appropriate, and also did not monitor calls with customers properly, the FCA said.
The regulator also found that before 2013, Prudential had offered sales-linked incentives to call handlers, such as earning 37% on top of their base salary and winning prizes such as spa breaks or weekend holidays, which it said could prompt call handlers to put their own interests ahead of customers'.
The FCA said Prudential had voluntarily agreed to review past non-advised annuity sales to identify if it needed to compensate customers, and that as of Sept. 19, 2019, had offered £110 million in redress to 17,240 customers. It also said the insurer has already contacted the vast majority of potentially affected customers.
As Prudential accepted the FCA's findings, the regulator discounted its fine by 30%. The insurer would have otherwise paid £34.1 million.
