Prosperity Life fined for breach of Lautro rules
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.PROSPERITY LIFE, the small life insurance arm of Municipal Mutual, the recently troubled council insurer, has been fined pounds 75,000 for allowing sales agents to 'churn' clients' investments, writes Paul Durman.
Prosperity has already paid out about pounds 750,000 compensation to investors who suffered. A salesman for a firm called All Saints encouraged more than 70 investors to cash in their existing investment bonds with another life office and switch the money to Prosperity. The costs involved meant this was contrary to the investors' interests.
Lautro, the life insurance regulator, found that Prosperity had 'failed to take all reasonably practicable steps to monitor' All Saints' investment business and had committed a serious breach of Lautro's rules.
Nigel Herrick, Prosperity's sales and marketing director, said Prosperity had severed its links with All Saints in mid-1991. It does not intend to appeal. Having recently transferred its direct sales force to Laurentian, a larger life insurer, Prosperity now sells through tied agents, independent advisers and direct marketing.
The company has had talks with potential purchasers, but Mr Herrick said there was no urgency to find a new owner. It had sufficient financial backing to ensure its solvency.
MMI has transferred the bulk of its ongoing business to Zurich Insurance for about pounds 70m. Its past book of business, on which it has suffered heavy losses, is in run-off.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments