MPs press FSA chief over mis-selling
Friday 15 May 1998
Howard Davies, chairman of the Financial Services Authority, was reporting to the Treasury select committee on the progress of the review in personal pensions mis-selling.
Mr Davies said he was "100 per cent confident" that the industry would be "pretty close" to meeting its deadline of reviewing all mis-selling cases by the end of this year.
To date, 644,891 mis-selling cases have been identified. By March this year, 67 per cent had been reviewed with 227,000 offered redress - generally financial compensation. At the same point last year, only 15 per cent of known cases had been reviewed.
Mr Davies said the FSA and other regulatory bodies had been instrumental in speeding up the process. But MPs questioned the 211,000 cases which had been reviewed but with no redress or compensation offered.
Mr Davies defended his position, saying the review process encouraged as many people as possible to come forward but it was inherent in this system that many of these people would not have been mis-sold pensions. He said he knew of at least 600 review cases that were now with the ombudsman.
Quentin Davies, the Conservative MP, pressed Mr Davies on the fines imposed by the FSA on life offices and pensions firms. He asked whether the fines in some cases would be paid for from companies' profits, with the result that policyholders again would lose by seeing diminishing returns on invested pensions funds.
Mr Davies said at present the FSA did not have the powers to levy fines directly on company executives.
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