FCA fines Stonebridge International Insurance Limited £8.4m in relation to sales of i

[Legal Beagles]

The Financial Conduct Authority (FCA) has fined Stonebridge International Insurance Limited (Stonebridge) £8,373,600 in relation to sales of accident insurance products. Between April 2011 and December 2012, Stonebridge targeted low and middle income customers without college degrees or professional qualifications, with its personal accident, accidental death and accidental cash plan insurance products. Outsourcing companies sold […]

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Its business strategy of maximising sales of the Products was implemented at the cost of the fair treatment of its customers. In particular:

a) There were deficiencies in the sales process guides designed by Stonebridge to facilitate the sales calls, known as call flows, which were designed in a manner that channelled customers who had families automatically towards the broader and costlier family cover;


b) The sales process encouraged sales personnel to make use of cancellation rights to secure sales. Customers were encouraged to purchase the Products by being informed that they could cancel their policies within 30 days and not incur any fees if they did not consider the Products suitable for their needs; and


c) When customers wanted to cancel their policies, the customer services personnel presented barriers to cancellation. Stonebridge’s training process encouraged these personnel to overcome customers’ objections which resulted in customers not succeeding in cancelling policies despite several attempts.

[Amethyst]

Re: FCA fines Stonebridge International Insurance Limited £8.4m in relation to sales

1. Final Notice - Stonebridge International Insurance Limited.
2. Information on the products:
   • Accidental Death Plan allowed relatives of policy holders to receive a lump sum if the policy holders died as a result of an accident. The average monthly premium for the policy during the Relevant Period was £6.19 for single cover and £8.76 for family cover.
   • The Accident Cash Plan enabled customers to receive a fixed amount of money each day if they were unable to work or look after their family. The average monthly premium for the policy during the Relevant Period was £7.17 for single cover and £11.12 for family cover.
   • The Personal Accident Plan provided a range of fixed amounts for death, hospitalisation and accidental injuries. The average monthly premium for the policy during the Relevant Period was £6.35 for single cover and £12.93 for family cover.

a significant number of customers were placed at risk of mis-selling by Stonebridge’s failings. At the end of 2012, Stonebridge had 558,000 customers of which
approximately 40% were based in the UK and the remainder were based in Europe. During the Relevant Period, 486,644 customers were sold policies on Stonebridge’s behalf by the Outsourcing companies in the UK and the European Countries.