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Barclays Sets Aside $1.1 Billion More for Insurance Claims

Source NY Times

Posted on 19 Oct 2012 by Neilson

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LIBORThe British bank Barclays said on Thursday that it had set aside an additional £700 million ($1.1 billion) related to the inappropriate sales of insurance to British customers.

Barclays, which agreed to a $450 million settlement with British and American authorities in June in connection with a rate-rigging scandal, had already made provisions of £1.3 billion to compensate clients who were sold insurance that covered them if they were laid off or became ill.

The bank said it was setting aside the extra money after receiving more claims during the first half of the year than it had expected against the so-called payment protection insurance. Barclays is to announce its third quarter results on Oct. 31.
Together, a number of other banks, including the Royal Bank of Scotland and HSBC, have set aside billions of dollars to compensate customers who were inappropriately sold the insurance.

In the wake of a number of banking scandals, British politicians are examining ways to improve the culture inside the country’s financial services sector. A parliamentary commission is expected to offer suggestions for new legislation by the end of the year.