The input of in-house legal teams at life insurers has come under the spotlight following warnings from the Financial Services Authority (FSA) that some companies are not exercising sufficient control over legal risk.
Prudential is just one company to launch a review of the level of its legal procedures and the overall input of its legal team in the development of products and marketing literature. This follows the receipt of an industry-wide warning letter from the FSA late last month.
Head of legal for Prudential Peter Maynard told The Lawyer: “We’re reviewing the input on product and marketing material development. We’re wading through the detail of our processes at the moment and will respond to the FSA in due course.”
The letter, sent out by the FSA to the chief executives of all life insurance firms and friendly societies, called for the companies to assess whether their procedures for managing legal risk during the development and marketing of financial products were sufficient, and whether more legal advice should be taken.
It follows research by the FSA showing that some companies did not have any procedures in place for obtaining legal input into the development of products or marketing literature.
As a result, all of the companies contacted have been asked to report back on the effectiveness of their legal functions and the actions proposed to correct any shortfalls to the FSA by 30 November.
Standard Life in-house counsel Gerrit Henstock said the company’s 76-strong in-house legal team was involved regularly in the development of products or marketing literature and it was unlikely that the company would need to adjust its procedures.