FSA forces Scottish Equitable to refund £60m to customers

LIFE insurer Scottish Equitable has been fined £2.8m and ordered to pay £60m in compensation to several hundred thousand policymakers after a series of administrative failures caused “significant customer detriment.”

The Financial Services Authority (FSA) said yesterday that the company was guilty of a series of errors including incorrect pensions calculations, not issuing thousands of policyholder documents, and failing to trace policyholders who had moved home.

Last year, the life insurer admitted to the FSA that it had identified 300 issues relating to the administration of its policies. Half of the compensation – £30m – must be paid back by the end of the year.

Aegon, which owns Scottish Equitable, said it “sincerely regrets that some customers have suffered financial detriment or inconvenience”, and resolving the issues was a “top priority.”

Margaret Cole, FSA managing director of enforcement and financial crime, said: “The redress package is significant news for the customers of Scottish Equitable and I am pleased that £30m will already have been paid back by the end of the month.”