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Scottish Widows sets up closed-book unit after FCA review

Scottish Widows sets up closed-book unit after FCA review

Scottish Widows has set up a dedicated business unit to deal with its closed book customers after the Financial Conduct Authority (FCA) said it would investigate how long-standing customers at the firm were treated.

The FCA released the findings of its closed-book review across the insurance market in March. The regulator said that it would commence investigations into Scottish Widows and five other companies after its examination of how long-standing customers were treated found that exit fees may act as barriers to shopping around and consumers may have been improperly informed of charges.

‘Responding to the recent FCA thematic review and recognising the group’s significant base of longstanding life, pensions and investment customers, a dedicated business unit has been created to support this customer group,’ Scottish Widows parent Lloyds Banking Group said in its half year results today.

No further information was provided on what support would be offered to closed book customers or on the progress of the FCA’s investigation.

‘Our success in recent years has been based on our focus on and commitment to doing the right thing for customers,’ Lloyds chief executive Antonio Horta-Osorio said. ‘Our strategy of becoming the best bank for customers and shareholders remains unchanged and we will continue to support the economy and help Britain prosper.’

While Scottish Widows said it had signed a further three bulk annuity transactions in the first half of 2016, taking its total bulk transactions since it entered the market at the end of 2015 to £1.25 billion, underlying profit decreased by 24 per cent, to £446 million on the back of ‘adverse economics and weather related claims.’

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