This is policyholder advocate's original website which was launched on 21 November 2006.

This site has been regularly update during the reattribution negotiations but was closed to new information on 31 May 2009. We have kept it open as reference site.

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The One Minute Briefing

  1. More money has accumulated in two of Norwich Union with-profits funds than is needed to meet the liabilities of those funds.
  2. This money forms what are called the inherited estates. Norwich Union calculates that the total amount in the estates concerned was about £5.4billion at the end of 2007. This value has since decreased, due to both pre-reattribution distribution payments of £2.1billion to qualifying policyholders and to recent market turmoil. The most recent valuation was £1.4 billion.
  3. The money helps support the funds but it can also be used by the company for other purposes. It is important that the inherited estates are managed carefully and wisely in the interests of policyholders.
  4. There are two ways in which any of this money can be released from being used as it is now. First, under what is called a ‘distribution’, 90 per cent of any surplus of the inherited estates would go to policyholders in the form of bonuses and 10 per cent would go to shareholders. A distribution of this type was announced in February 2008. Some £2.3 billion was declared to be ‘surplus’ and 90 per cent will be paid out to eligible policyholders over the next three years.
  5. But, second, under a different process called a ‘reattribution’, Norwich Union is proposing that shareholders buy out the interest that policyholders have in the whole of the remaining money in the inherited estates. This would allow the company more freedom in how it uses the money. (It is possible for there to be both a reattribution and a distribution.)
  6. Clare Spottiswoode is the independent person (called the policyholder advocate) appointed by the company and approved by the Financial Services Authority to champion the cause of policyholders.
  7. She and her advisers have discussed with Norwich Union how much money is in the inherited estates, what it will be used for in future, and how likely it is that there will be 90 % distributions in future. She has also examined, as has the Independent Expert, Norwich Union’s detailed plans for the future security of your funds.
  8. Negotiations finished and on 30 July 2008 the policyholder advocate and Norwich Union announced then that an offer worth £1 billion would be made to eligible policyholders. That offer included a minimum payment of £400.
  9. Since the global market turmoil in October 2008 the inherited estates have been subject to great volatility, there has been a reduction in their value, and in February 2009 the company announced that the deal no longer worked for it. The company proposed re-opening discussions to see how a deal might still be put to policyholders.
  10. We were able to confirm on 6 May 2009 that a new, flexible offer has been established for policyholders. This allows them to retain their right to choose whether or not they wish to participate in the reattribution, while allowing them to benefit from any increases in the value of the inherited estates over the coming months.
  11. Policyholders will begin to receive their individual offers from June together with information about the offer from the policyholder advocate. However, more information will be available on the website. There will also be a series of roadshows about the reattribution for policyholders. Her main report will also be available on request.