28th Mar 2014 13:12
LONDON (Alliance News) - Legal & General Group PLC has requested the Financial Conduct Authority to bring forward publication of its business plan for next year in the wake of Friday's "disorderly market."
Earlier Friday, an FCA spokesperson confirmed to Alliance News that details the review is set to begin this summer and will be detailed in the business plan, published Monday.
The plan will include pensions, endowments, investment bonds and life insurance products.
"Legal & General notes media speculation about the FCA's potential review of the charging basis for legacy back books," the FTSE 100 company said in a statement.
"Legal & General does not outsource customer administration: our customers benefit from the continuity of a single product and service provider. Our operating practices ensure we provide good value to our customers, and we have operated a programme of ongoing product reviews for more than 10 years," it continued.
"We therefore look forward with confidence to working with the FCA once it issues official guidance about the potential review," the statement said.
Speaking to the Telegraph, Clive Adamson, the director of supervision at the FCA, said: "We want to find out how closed-book products are being serviced by insurance companies, as we are concerned insurers are allocating an unfair amount of overheads to historic funds.
"As firms cut prices and create new products, there is a danger that customers with older contracts are forgotten. We want to ensure they get a fair deal. As part of the review we will collect information to establish whether we need to intervene on exit charges."
The news has weighed down hard on life insurers, with Legal & General shares Friday quoted at 197.90 pence, down 6.8%.
By Samuel Agini; [email protected]; @samuelagini
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