Stonebridge International Insurance Ltd
Stonebridge International Insurance Ltd., (Stonebridge) has been a general insurer for over 10 years. Its European head office is in Maidenhead, in the United Kingdom. The company was licensed to passport its services in the following countries: Denmark, Finland, France, Germany, Ireland, Italy, Norway, Poland, Portugal, Spain, Sweden and the United Kingdom.
Stonebridge International Insurance Ltd. is no longer actively selling insurance policies and is servicing existing policies.
It has recently announced that it is cancelling one of the early life insurance policies and has contacted customers to cancel them.
If during the sales call by Stonebridge International Insurance Ltd. (or an outsourced company on its behalf). the customer was told that, as long as the policy is stiil in force and the monthly premium paid, that customer could keep the policy until the termination age, Stonebridge International Insurance Ltd. would be unlikely to be able to cancel the insurance policy, as it would have been a major reason for the customer buying the policy in the first place.
Stonebridge International Insurance Ltd., is authorised and regulated by the Financial Conduct Authority and is a member of the Association of British Insurers.
History
Stonebridge International Insurance Ltd. is an insurance company that was founded in 1998, and is a member of the AEGON group of companies. Its Head Office is in Maidenhead in Berkshire. It was originally authorised and regulated by the Financial Services Authority, the FSA to issue insurance policies in the UK and on the Continent of Europe in certain countries under "Passporting". In April 2013 the FSA was replaced by the Financial Conduct Authority, the FCA. The FCA authorised and regulated Stonebridge International Insurance Ltd. to issue insurance policies in the UK and on the Continent of Europe in certain countries under passporting.
As a UK based insurer Stonebridge International Insurance Ltd. was able to sell insurance on a non advised based in the UK without the need to go through an intermediary.
On the Continent of Europe, Stonebridge International Insurance Ltd. was required to sell its insurance products through an intermediary. It chose to use its sister company (also based in Maidenhead and also owned by AEGON), AEGON Direct Marketing Services Europe Ltd. to make those sales.
Stonebridge International Insurance Ltd. has no staff and is managed by staff working for the sister company, the AEGON owned AEGON Direct Marketing Services Europe Ltd.
AEGON's history dates back to the mid-1800s. In 1983 AGO and Ennia merged and formed AEGON. In addition to the acquisitions of Scottish Equitable in the UK in 1983, Providian in the USA in the 1997, Guardian Royal Exchange Assurance in the UK in 1999, Transamerica in the USA in 1999, Stonebridge International Insurance Ltd was formed to provide a range of accident and health products.
The AEGON owned pension provider, Scottish Equitable was fined £2.8 million by the financial services regulator the FSA in December 2010 for wrongdoing. The original fine awarded by the FSA was £4 million but it was reduced to £2.8 million because AEGON admitted its guilt and made an early settlement
The Aegon group provides life insurance, pensions and investments products and has some 40 million customers in over twenty markets in the Americas, Europe and Asia. The group has around 27,500 employees worldwide with total assets exceeding €332 billion as at 2010.
On 7 August 2014 Stonebridge International Insurance Ltd. was fined £8.373,600 by the financial services regulator, the FCA for wrongdoing. That fine of £8,373, 600 was reduced from the higher amount of £11, 962, 317 because AEGON admitted its guilt and made an early settlement.
That is the second time in a 5 year period that an AEGON owned company based in the UK was fined by the financial services regulator. The total amount of the fines after the discount for early settlement and admittance of guilt by AEGON was over £11 million.
In its Enforcement Ruling against the AEGON owned Stonebridge International Insurance Ltd. issued in August 2014 the financial services regulator outlined the detail of some of the wrongdoing which had led to the substantial fine of £8,373,600.
The wrongdoing included selling insurance policies on the basis that they could be cancelled, and then putting a place a barrier to cancellation to make it difficult for customers to be able to cancel. Senior managers were paid bonuses of up to 70% of their annual salary if cancellation targets were met. Other wrongdoing included failing to provide customers with information in a clear, fair and balanced manner.
In the Enforcement Ruling the FCA suggested that the wrongdoing was contributed to by the AEGON owned Stonebridge International Insurance Ltd. not having the correct processes in place and that the wrongdoing was caused by outsourced companies.
What it did not explain was that the senior management of the AEGON owned Stonebridge International Insurance Ltd. worked in the sister company, the AEGON owned AEGON Direct Marketing Services Europe Ltd. and that it was those staff that gave the outsourced companies the instructions and training. The outsourced companies were following the instructions given to them by AEGON. What would have been the relationship with the suppliers if they had not followed AEGON's training and instructions?
It was the AEGON owned AEGON Direct Marketing Services Europe Ltd. staff who listened to recordings of calls made by the outsourced companies and agreed that the initial sale was valid, or the barriers to cancellation imposed by AEGON were ok- despite the evidence of wrongdoing. Despite AEGON Direct Marketing Services Europe Ltd. being responsible for at least 60% of all sales of Stonebridge International Insurance Ltd. products, and despite the senior management of Stonebridge International Insurance Ltd. being employed in AEGON Direct Marketing Services Europe Ltd., no action was taken by the FCA against AEGON Direct Marketing Services Europe Ltd. and no fines were issued against any AEGON employee who was either responsible for, or condoned the wrongdoing.
The FCA only looked at the activity of Stonebridge International Insurance Ltd. between the period April 2011 and December 2012 and only appointed a Skilled Person to look at the activities in the UK.
This is despite the FCA having evidence of wrongdoing before and after that period, and evidence of Stonebridge International Insurance Ltd. policies that Stonebridge International Insurance Ltd. voluntarily withdrew from sale in the UK (in return for a discount in the amount of the Enforcement Ruling fine - but for that the fine would have been EVEN more than the £8,373,600 amount), being sold on the Continent of Europe in 2013 by its sister company AEGON Direct Marketing Services Europe Ltd., the company where the staff managing Stonebridge International Insurance Ltd. worked.
Paul Thilo was the UK General Manager of AEGON Direct Marketing Services Europe Ltd. during the period of the review by the FCA of Stonebridge International Insurance Ltd. and responsible for the activities of Stonebridge International Insurance Ltd. During the same period of the review he became interim CEO and responsible for sales of Stonebridge International Insurance Ltd.'s insurance products in the UK and the Continent of Europe.
After the Enforcement Ruling he was made permanent CEO of AEGON Direct Marketing Services Europe Ltd. This was done despite the FSA, the FCA and AEGON management all having full knowledge of his involvement in the wrongdoing that resulted in the fine against AEGON of £8,373,600.
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Operations
Stonebridge International Insurance Ltd. provides accident, health, and unemployment cover for individuals, which it promotes direct and through business partners across Europe within the financial, retail and utility sectors.
Stonebridge International Insurance Ltd. has only ever had an office in the UK, in Maidenhead. It operated in France, Germany, Italy and Spain through its sister company, the AEGON owned AEGON Direct Marketing Services Europe Ltd., whose Head Office was also based in Maidenhead in Berkshire.
Stonebridge International Insurance Ltd. sold its products in the main by cold telemarketing sales calls. It bought customer telephone numbers and names from business partners and made cold calls to them. Many of the customers had provided their bank, building society, credit card company, mail order company, teleshopping provider etc. with permission via a tick box on their initial application for third parties to contact them to offer products. This permission was used to pass the data to Stonebridge International Insurance Ltd.
In France, Italy and Spain Stonebridge International Insurance Ltd. products were sold via cold telemarketing calls through the intermediary AEGON Direct Marketing Services Europe Ltd. who was responsible for the sale. Sales by AEGON Direct Marketing Services Europe Ltd. accounted for 60% of all Stonebridge International Insurance Ltd. sales. Despite, this, and the fact that the people who managed Stonebridge International Insurance Ltd. worked in AEGON Direct Marketing Services Europe Ltd., the FCA did not investigate the activities of AEGON Direct Marketing Services Europe Ltd.
Stonebridge International Insurance Ltd.'s products are mainly monthly renewable policies. Customers were contacted by cold sales calls and offered free cover for either 30 or 60 days (usually 60 days). There is much evidence on the Continent of Europe at least that customers took out the policy believing that they had free cover during which they could make up their mind and that their agreement was to take out a free policy.
Many were led to believe that at the end of the free cover period there was no obligation to take out the policy. Some were informed that they were providing their bank details so that claims could be paid during the free cover period and that there was no long standing agreement to take out cover. It is a typical inertia sale. Rather than sign up for a 12 month policy the customer may have signed up for years and years of cover (until the customer reaches the age of 65, 70 or even 80)
What customers did was to consent to take out a monthly policy and to pay a monthly premium infinitum at the end of the free cover period.
After receiving the initial policy documents Stonebridge International Insurance Ltd. took advantage of legislation that legally allowed them to not contact the customer again about the policy.
Does Stonebridge International Insurance Ltd. have customers who are regularly paying a monthly premium from their bank account, credit card account, or account with a mail order provider, teleshopping provider etc. and they do not need even realise that they have an insurance policy in force?
AEGON UK had an executive role in running AEGON Direct Marketing Services Europe Ltd. and Stonebridge International Insurance Ltd. in 2013.
Is that why the FCA did not investigate the activities of those companies in 2013 despite having overwhelming evidence of wrongdoing?
Or was it because the Director of Compliance at AEGON UK is Amanda Bowe, the ex Head of Retail Distribution Review at the FSA?
References
- ↑ "Stonebridge fined 8.3 mn pounds for mis-selling accident insurance products". Business Sun. Retrieved 8 August 2014.
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