The UK Financial Services Authority (FSA) has fined Royal Liver Assurance GBP550,000 for mis-selling with-profits savings policies.

The FSA found that Royal Liver sold the policies to customers who had no demonstrable need for life cover, and in other cases, policies which were not suited to their needs. As a result, customers with a general savings need were recommended a product where there was a risk that the policy could pay back less than the total value of what was paid in premiums.

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. The failings were systemic and arose from weaknesses in the firm’s sales and compliance processes and persisted over a long period of time. Firms must make sure that they take account of all products which may be suitable when making a recommendation, says Margaret Cole, the FSA’s director of enforcement.

The FSA has reported that the firm co-operated fully with the enforcement action and has offered compensation to all customers aged 59 and over, and additionally to those customers of any age whose policies had been projected to pay, on maturity, a sum which would not exceed the total premiums paid.

The regulator also noted that the financial penalty imposed had been constrained by the cooperation of the firm.