Royal Liver fined for mis-selling

Insurer Royal Liver has been fined £550,000 (US$1m) for mis-selling with-profits policies by the Financial Services Authority (FSA).

The firm was found to have sold policies to customers who had no “demonstrable” need for them.

As a result of the mis-selling policyholders were exposed to too much investment risk, the FSA added.

The fine relates to the sale of more than 2,000 with-profits policies from 1 July 1999 to 15 September 2003.

“This was a serious case of mis-selling, particularly as a significant number of Royal Liver Assurance’s customers were nearing retirement age and did not need the cover they were sold,” said Margaret Cole, the FSA’s director of enforcement.

“The failings were systematic and arose from weaknesses in the firm’s sales and compliance processes and persisted over a long period of time,” she added.

Royal Liver has accepted the FSA ruling and has already compensated more than 2,000 policyholders, refunding premiums worth a total of £2.24m. (US$4m)