FSA challenges annuity providers
by Gill Montia
Story link: FSA challenges annuity providers
The Financial Services Authority (FSA) has undertaken a review of the quality of information supplied by 55 annuity providers, to pension customers approaching retirement age.
The regulator particularly took into consideration information about the option to shop around for an annuity and while over 60% of the firms surveyed produced literature that provided clear information, almost 40% need to make improvements to ensure that pension customers are being treated fairly.
The FSA also found that delays occurred in over 60% of 238 annuity transfer cases it reviewed and identified the key reasons for this as the complexity of the process and confusion caused by the variety of forms used to complete transfers.
The reviews form part of the FSA’s work on Treating Customers Fairly (TCF) and annuity providers that need to make improvements to their literature and processes must do so by the FSA’s TCF deadline of December 2008.
The FSA’s director of TCF, Sarah Wilson, says the choice of annuity provider can influence an individual’s lifetime income and that poor communications from insurers may result in people making poor decisions.
Firms that do not meet the December deadline are at risk of direct action by the watchdog.