Royal London has agreed to change the terms used in its Scottish Life branded unit linked consumer contracts after the Financial Services Authority (FSA) found they may have been unfair.
The FSA took issue with a several clauses in the contract. One allowed the firm to vary its annual management charge by a percentage to be determined by the firm's actuary. In a notice of understanding, the FSA said: "In our view, this clause gave the firm too broad of discretion to vary the charge made to consumers." The FSA said the clause had the potential to "cause a significant imbalance in the rights of the parties in favour of the firm". "This was because the term gave the firm's actuary a wide discretion to vary the annual management charge. The wording of the term did n...
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