(Adds analyst, detail, Prudential no-comment, shares)
LONDON Oct 18 Insurer Aviva said on
Tuesday it did not expect to take "significant" action after
Britain's regulator said some firms needed to review their sales
of annuities to ensure people got the right deal.
Rival Standard Life said on Monday it had been asked
by the Financial Conduct Authority to look again at its sales
after the regulator conducted an industry-wide review of sales
The FCA carried out the review because it was concerned that
people in ill health may not have been told about so-called
enhanced annuities, which offer a higher annual income to those
with lower life expectancy. It said it did not find an
industry-wide problem with annuity sales.
"We welcome the announcement from the FCA," a spokeswoman
for Aviva said in an emailed statement to Reuters.
"Our work is primarily focused on supporting further future
improvements to the market, rather than on retrospective action.
We don't anticipate having to take any significant retrospective
action," she said.
Legal & General, another rival, has also said it was
"pleased" with the outcome of the review.
The FCA said after its review that some firms needed to look
again at their sales of annuities from 2008 onwards and
compensate people if they did not get the right deal.
Analysts at Jefferies estimated Standard Life would need to
pay compensation of around 120 million pounds ($147 million) and
also expects Prudential would have to pay compensation,
estimating it at around 200 million pounds.
"The impact of any compensation ... is manageable," they
said in a note.
A Prudential spokesman declined to comment.
Standard Life's shares dropped nearly 4 percent on Monday
but were up 1.2 percent at 329 pence at 1227 GMT on Tuesday, in
line with the FTSE 100 index. Aviva's shares were up
0.16 percent at 439 pence.
($1 = 0.8150 pounds)
(Reporting by Carolyn Cohn and Simon Jessop, editing by Sinead
Cruise and Susan Fenton)