FSA has fined Sun Life Assurance Company of Canada (UK) Limited £600,000 for breaches of Principle 3 and various rules in the Prudential Sourcebook for Insurers (INSPRU) and the Supervision Manual (SUP). It found the firms's governance arrangements in respect of with-profits business operated within a closed book of business were unclear and inadequate. This led to the risk that policyholders would not have adequate protection. Specifically, FSA found the firm executed two significant and material derivatives transactions over one of its with-profits funds without adequate review from its with-profits committee or the formal approval of the board. FSA said the failings were particularly serious because it had flagged its concerns about governance arrangements for with-profits funds, including in a dear CEO letter to firms. (Source: Final Notice – Sun Life Assurance Company of Canada (UK))