The FCA has fined The Prudential Assurance Company Limited (Prudential) £23,875,000 for breaching Principle 3 (Management and Controls) and Principle 6 (Treating Customers Fairly) of the FCA’s Principles for Businesses in relation to the non-advised sale of annuities to its customers between 2008 and 2017.
The FCA found that Prudential failed to put in place adequate systems and controls to ensure that appropriate and timely information was provided to customers about their retirement options, in particular failing to inform customers that they may be entitled to an enhanced annuity or may have been eligible for a better rate on the open market. The FCA found that these weaknesses in Prudential’s systems and controls coupled with the complex nature of annuities and the potential vulnerability of customers led to some customers being treated unfairly.
The fine imposed by the FCA was calculated principally on the basis of a percentage of the revenue generated by Prudential between 2008 and 2017 from this area of the business, but took into account the fact that Prudential has, to date, offered £110 million in redress to approximately 17,000 customers. Prudential did not dispute the FCA’s findings, resulting in a 30 per cent discount on the fine. Were it not for this discount, Prudential would have been fined a total of £34,107,200.