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FCA closes Scottish Widows exit fee investigation

Financial Conduct Authority ends investigation into Lloyds bank insurance arm but continues to work with four other companies over alleged hidden exit fees on life insurance and savings policies.

 
FCA closes Scottish Widows exit fee investigation

The Financial Conduct Authority (FCA) has ended its investigation into Scottish Widows over alleged hidden exit fees on its life insurance and savings policies.

The City watchdog said there would be no enforcement action against the Lloyds bank subsidiary although it would raise a number of ‘issues uncovered’ in its two-year proble.

The investigation, launched in March 2016, was part of a review of the way six life insurers treated their longstanding customers, including their use of exit fees.

In the same year Scottish Widows set up a dedicated business unit to deal with its closed-book customers in response to the FCA review.

The regulator said it would continue with its review of Prudential, Countrywide Assured, Old Mutual and Abbey Life, adding ‘no decisions regarding these firms have been reached by the FCA at this stage’.

Last September the regulator closed its investigation into Police Mutual.

At the time of the exit fees investigation launch, the FCA said ‘the six firms may have failed to inform customers of these charges at the time they were incurred.’

The regulator's original launch of the review four years ago was widely criticised after it caused insurers' shares to crash.

 

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