The Financial Conduct Authority (FCA) will review Britain insurers' treatment of customers that have bought "with-profits" policies that guarantee returns, the markets watchdog said. Although no longer widely offered by insurers, with-profits policies deduct insurers' costs from investment profits before the rest is returned to investors. The FCA may also investigate "smoothing", a practice which aims to stabilise an investment against the ups and downs of markets. A review into with-profits policies launched by the FCA in 2010 found that most firms did not adequately demonstrate practices accordant with well-run with-profits insurers in one or more assessed areas.
The Financial Conduct Authority (FCA) will review UK insurers' treatment of customers that have bought "with-profits" policies that guarantee returns, the markets watchdog said. Although no longer widely offered by insurers, with-profits policies deduct insurers' costs from investment profits before the rest is returned to investors. The FCA may also investigate "smoothing", a practice which aims to stabilise an investment against the ups and downs of markets. A review into with-profits policies launched by the FCA in 2010 found that most firms did not adequately demonstrate practices accordant with well-run with-profits insurers in one or more assessed areas.