Royal Scottish Assurance Fined £2m
FSA fines Royal Scottish Assurance £2m
30th November 2000
Royal Scottish Assurance has been publicly fined £2m by the Financial Services Authority as a result of 'serious deficiencies' in one of its endowment mortgage products.
The fine reflects the seriousness of the failings, which could have caused 30,000 customers to face an endowment shortfall. £50m has been set aside for possible compensation, and the firm has committed itself to a complete change of management.
The failings identified included 'materially misrepresenting' the reasons for shortfalls to customers - claiming that they were down to reductions in projected returns, while in reality they were caused by 'fundamental errors' in calculating the initial premiums.
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