MORE BIG FINES were "in the pipeline" yesterday after the Financial Services Authority imposed a rec...
MORE BIG FINES were "in the pipeline" yesterday after the Financial Services Authority imposed a record £1m penalty on Lloyds TSB for mis-selling endowment mortgages, says this morning's FT newspaper.
The City watchdog's warning came after the UK's third largest bank was forced to set aside £165m to compensate between 42,000 and 46,000 policyholders. They were mis-sold endowment mortgages between 1995 and 1999 by the Abbey Life arm of Lloyds TSB. Up to 4,000 other customers may also be due compensation.
Falling investment returns mean that 60% of the 10m outstanding endowment mortgages are forecast to fall short of the amount needed to repay the original sum borrowed, on which only interest was paid.
The FSA has so far identified 20 life companies as having potentially mis-sold mortgage endowments. Some have themselves approached the regulator. They have collectively set aside £448m for 266,000 customers.
ROYAL LONDON, the UK's second largest mutual life assurer, yesterday said it was cutting 670 jobs, blaming increasing pressures on the industry's profit margins, adds the FT.
The job losses will be spread across both the Colchester-based mutual and Scottish Life, the Edinburgh-based life office it acquired last year.
Royal London said there would be recruitment in some parts of the group, so that there would be a net reduction of about 400 in the 4,500 employees. It was expected a significant number of the job losses would be achieved through natural turnover.
AMP'S chief executive, Andrew Mohl, has been granted a salary and bonuses package totalling A$4.5m (£1.7m) as he attempts to turn round the troubled Australian insurer, says the Daily Telegraph.
Mohl, appointed in October, gets A$1.5m salary plus a short-term incentive scheme worth up to A$3m.
He will also receive an options package capped at twice his salary. If he were sacked by the board, he would receive two years' salary as compensation.
The details emerged as AMP announced further restructuring after Monday's announcement that 1,900 jobs are being cut in Britain.
AN EQUITABLE Life policyholders group is calling for the resignation of Vanni Treves amid speculation that the chairman of the troubled society will soon step down, says the Scotsman.
The Equitable Life Members Action Group (EMAG), which comprises 10,000 policyholders, has written to all of the society's non-executive directors asking them to replace Treves "with a full-time, experienced company doctor before it is too late".
EMAG claims Treves does not spend adequate time working for the society and has made misleading statements to its policyholders. It also said Treves has made strategic errors in steering the society, which admitted last month it was close to breaching solvency rules.
THE TREASURY has extended an olive branch to the prime minister over the euro, in a bid to quash reports that Gordon Brown and Tony Blair are at war, continues the FT. But it stopped well short of offering unequivocal support for euro entry.
Ed Balls, Mr Brown's chief economic adviser, used a speech to academics in Oxford last night (Wednesday) to deliver the most positive-sounding words on the euro heard from the Treasury for a long time. And Mr Brown told the Parliamentary Labour party on Wednesday he believed that a euro referendum could be won decisively, if the government said its five economic tests had been passed.
Since the chancellor's pre-Budget report last week, which indicated deep reservations about the euro, he has appeared to be on a collision course with Mr Blair's ambition to join.
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