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Release Date: 30th October 2018

To access the original FCA document, click here.


The Financial Conduct Authority (FCA) has fined Liberty Mutual Insurance Europe SE (Liberty) £5,280,800 for failures in its oversight of mobile phone insurance claims and complaints handling processes between 5 July 2010 and 7 June 2015. Liberty delegated these functions to a third party but did not maintain adequate systems and controls to ensure fair treatment of customer claims and complaints.

Liberty’s lack of oversight resulted in some claims being unfairly declined or inadequately investigated. Complaints regarding these issues were often overturned, creating an ineffective two-stage claims process. In other instances, complaints were dismissed without proper investigation. Despite FCA guidelines issued in 2013 and reiterated in 2015 regarding the mobile phone insurance market and outsourcing arrangements, Liberty failed to meet these standards.

Before the FCA’s enforcement investigation, Liberty and the third party conducted a voluntary redress and remediation exercise, offering nearly £4 million to affected customers. Liberty’s early settlement in the investigation qualified them for a 30% discount, reducing the fine from £7,544,000 to £5,280,800.

Key Takeaways for Other Firms:

In conclusion, the FCA’s action against Liberty Mutual Insurance Europe SE underscores the critical importance of maintaining effective oversight of outsourced functions to ensure fair treatment of customers.

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