L&G 'Knew They Were Mis-Selling'; Boss Faces MPs' Fury after Financial Mail Uncovers How Company Ignored Mortgage Crisis Warnings INSURANCE GIANT AT WAR WITH CITY WATCHDOG IS PLUNGED INTO NEW ENDOWMENTS ROW BY FORMER DIRECTORFINANCIAL MAIL
Byline: JEFF PRESTRIDGE
EXECUTIVES at Legal & General knew they were mis-selling mortgage endowments during the late Nineties, Financial Mail can reveal.
Emails sent between senior directors and passed on by an L&G whistleblower show that in 1998, Mike Bolton, the insurance giant's UK actuary at the time, believed endowments no longer had a role to play in the mortgage market.
Yet despite these concerns, the risk to customers and the threat to its reputation, L&G continued to sell them for at least two more years.
The Financial Services Authority has already attempted to fine the company for endowment misselling based on other evidence of wrongdoing during this period. L&G has refused to accept the fine and is appealing to a tribunal.
Today's revelations could have a crucial impact on that case as well as embarrassing chief executive David Prosser when he gives evidence to the powerful Treasury Select Committee on Tuesday.
Prosser has been called before the MPs along with bosses from rival insurers over concerns that the industry is not doing enough to compensate five million people who were mis-sold endowments.
Jon Maguire, who was instrumental in building L&G's retail investment business during the Nineties, passed the crucial emails to Financial Mail because he believed that customers who were sold endowments between July 1998 and the end of 2000 should be compensated and senior executives disciplined.
He has also written to John McFall, chairman of the Select Committee, ahead of this week's meeting. …