Insurance news from Lloyds of London includes fine for $6.7 million

UK Insurance news
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UK Insurance newsAnother penalty was decided upon due to the mis-sold policies in the United Kingdom.

The financial regulator in Great Britain has issued a fine to Lloyds Banking Group, making leading insurance news as the insurer failed to appropriately manage the complains connected with the policies that were sold on mortgages and loans.

This fine has been decided to be £4.3 million ($6.7 million) due to the company’s failings in systems and controls.

According to the Financial Services Authority (FSA), the bank failed to implement and use systems and controls that were appropriate for handling the complaints from customers that were making insurance news regarding the inappropriate sale of the policies. This lead to delays in the compensation of up to 140,000 customers after they were wrongly sold payment protection insurance (PPI).

This insurance news is the result of the organization’s failure to meet the 28 day deadline.

The FSA stated that from May 2011 through March 2012, Lloyds did not take its required compensation steps within their 28 day deadline following the decision as to whether or not the customers were entitled to receive a payment. Banks in Britain had responded to the insurance news by setting over £12 billion aside for compensating the customers that had been inappropriately sold the coverage.

The PPI policies were designed to provide protection to individuals with loans or mortgages in the case that they became ill or lost their jobs and were no longer capable of making payments. However, as insurance news reports revealed, these policies were often wrongly sold, including to people who refused the coverage, or who had no knowledge of the purchase that was made on their behalf. Lloyds has made the highest provision for compensation, among all of the banks in the United Kingdom, having set aside £5.3 billion.

It was explained by the regulator that almost a quarter of the Lloyds customers who were entitled to this insurance news compensation – that is, over 140,000 people, had not received their payments within the required 28 day deadline. Approximately 87,000 had not obtained their payment inside of 45 days, and nearly 8,800 were required to wait more than six months.

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