Friday, 14 July 2017

N Brown faces £40million redress for add-on mis-selling

Online retailer N Brown; best known for the JD Williams, Simply Be and Jacamo brands is faced with a compensation bill of up to £40million for add-on mis-selling. This relates mainly to the sale of credit insurance products between 2006 and 2014, and comes on top of an earlier penalty of £22.9m for PPI mis-selling, which hit profitability last year. 

The fine follows a review undertaken by the FCA into add-on insurance products which were deemed to have little or no value for customers. In February 2017, the FCA also agreed a "redress scheme" with Express Gifts, a subsidiary of Fiindel plc, for insurance products providing inadequate value. 

Financial services represent a significant source of revenue for N Brown, which is FCA registered in its own right, although this primarily relates to the provision of consumer credit. 

The "third party underwriter" responsible for the products and which partnered with N Brown has not been named in press reports, but the company has suggested that it may seek the insurer's assistance in offsetting the fine. 

We believe that the FCA may ultimately look in more detail at the regulatory issues surrounding insurance affinity partnerships and particularly, the ways in which appointed representative (AR) and introducer appointed representative (IAR) relations operate. Regardless of this, the demand for rigorous and effective compliance support has once again been highlighted. 

Monday, 3 July 2017

AIG LIfe partners with RBS for life cover

AIG Life has been selected as the sole protection partner for customers of Royal Bank of Scotland, NatWest and Ulster Bank. The partnership is designed to provide a range of "simplified" protection products, including life, critical illness and a guaranteed whole of life plan aimed at the over-60s. 

The partnership represents a significant win for AIG Life, which only announced its first significant affinity partnership in May 2016, when it secured a deal with the general insurer NFU Mutual (see our post dated 10 May 2016 for details). 

It also marks a significant loss for Aviva, which has worked with RBS since at least 2010. Aviva does however, retain protection partnerships with Barclays and Santander banks. 

The RBS Group continues to work with UK Insurance for home insurance, but ceased offering car insurance in January 2017, other than for its "Private Banking" customers.