Adam Phillips, Consumer Panel chair commented: "We are seriously concerned that, although the FSA introduced the current regime for with-profits in 2005, this report shows that policyholders are still not being treated fairly by the FSA's own measures.
“The Consumer Panel published a report in 2007 which highlighted problems in the governance of with-profits funds and the way firms communicate with policyholders. This review confirms that significant problems still exist, despite previous warnings from the FSA in "Dear CEO letters" and other communications.
“There are 25 million with-profits policies currently being used for pensions and other savings. It is totally unacceptable that firms' failure to play by the rules is still potentially exposing substantial numbers of consumers to risk.
“We have said for some years that the rules are inadequate, and this report shows that firms are not even conforming to those rules. The FSA has announced a further consultation at the end of this year. In the meantime, we welcome the FSA enforcement investigation against the worst offenders, and encourage urgent follow through on today's commitment to more intensive supervision of the current rules."
