Basd Behaviour by Life Companies – where are you FSA?

We have just dealt with a client who reached the age of 65 and the life company automatically bought its own annuity on a joint life basis. The fact that the client was happy to wait until they are older is apparently not relevant nor is the fact that she is single and therefore a joint life annuity will only profit the insurer concerned. They have rejected our complaint on the basis that ‘this is a policy condition’.

I am appoplectic. Where is the FSA who are supposing to be holding the life companies to account and to make them treat customers fairly? We have taken this up with the company and have at least got agreement to rewrite this onto a single life.

Needless to say we are dealing with a closed fund who frankly do not care for clients and clearly totally ignore FSA rules on treating customers fairly.

Annuity Misselling??????

One of our national newspapers ran an article last week about medically enhanced annuities. I have been surprised at the number of enquiries we have had from people who have bought an annuity and who were not asked if they had a medical condition when they bought the annuity. The result is that they have a lower income than they were entitled to.

The FSA insist that customers are treated fairly. How can it be fair not to point out the possibility of enhanced annuity rates to a customer and to ask for details of medical conditions??  I suspect the answer that will come back is that people are told to shop around but this really is not good enough.

Sureley the FSA really needs to get tough on what is clearly sharp practice.

Usless insurance companies and the 75 rule

This post is going to be a bit of a rant. A client rang a few days ago – he is 75 in two weeks and has not taken his pension benefits. He is immendiately caught by an HMRC rule which states that tax free cash must be taken by age 75 and a slow insurer whose low quality staff can only quote ‘ten days to give information’. So – either he waits for the insurer to grind into gear and loses his tax free cash – over £19,000 or he takes his benefits with the existing provider and loses the open market option.  We were able to guide him and fortunately he did have guaranteed annuity rates in two of his policies and so all was not lost.

This leads me to question why the FSA cannot challenge such poor treatment of customers by providers. Why are they not asking why the provider had not contacted the client – why they do not have systems to treat such cases urgently. This is a blatent case of a client being treated unfairly as a result of HMRC rules of which the provider is aware and yet the provider did absolutely nothing to help him – just gave him a poor annuity rate for one of his policies and refused to move outside the ‘ten days to deal with any enquiry mantra’.

The fact that the provider is a closed fund says a lot but come on FSA – time to start looking at things like this and make these providers earn their charegs.