Standard Life has set aside £175m ($220m) to undertake the review of its annuity sales and compensate customers who were not properly advised as to alternatives.
The UK's Financial Conduct Authority launched a thematic review over concerns that customers were not being well informed about enhanced annuities, an annuity product that offers higher incomes for customers with long-term health issues.
The watchdog raised concerns over the communication strategies of a small number of providers, including Standard Life, which led some people to purchase a standard annuity when they may have been eligible for an enhanced product.
Chief financial officer Luke Savage said Standard Life was hoping to claim back £100m of this cost from its professional indemnity insurance.
People:Luke Savage