October Update
Dear Policyholders,
The Treasury Committee has today published the responses of the FSA and Office of Fair Trading to the committee's report of 19 June about inherited estates. We have issued a media release giving Clare's view of it all. The release is below and you can see the report by following this link http://www.policyholderadvocate.org/downloads/HC1132-15th-special-report.pdf
There has been some media speculation of late about the impact of the current turmoil in the markets on the reattribution. Speculation is the operative word and we take the opportunity today to repeat what we have said to the media. At this point nothing has changed and we are working to prepare all the material necessary for the beginning of court processes.
Norwich Union is due to release its latest business figures to the market tomorrow and we understand a similar message will come from them.
Yours faithfully,
Jonathan Haslam
Director of Communications.
Media release from the Office of the Policyholder Advocate
27 October 2008
Spottiswoode comments on FSA and inherited estates - 'The policy remains the same but some welcome developments on transparency and process.'
The Financial Services Authority (FSA) and the Office of Fair Trading (OFT) responses to the Treasury Committee's Twelfth Report 'Inherited Estates' have been published today.
Clare Spottiswoode, policyholder advocate in the Norwich Union reattribution of inherited estate, today said:
'The first thing to remark on today is that there is nothing in this response that affects the reattribution deal announced in July. So far as this office is concerned we are fully engaged in documenting the deal, as is Norwich Union and the others involved.'
Turning to the response she said:
'This is a curate's egg of a response to a very clear report from the Treasury Committee. The FSA's fundamental policy stance has not changed and it remains difficult to see how the FSA can justify its support for the use of the estate to subsidise the capital cost of writing new business or for paying shareholder tax. These rules mean that shareholder interests are still favoured over policyholder interests.
'Moreover, I am still unconvinced by the argument for phasing special distributions. This seems unfair to policyholders who were eligible at the time of declaration but who do not receive the full benefit if their policies mature before all phases are paid.
'The FSA lays great emphasis on the work of with-profits committees. However, this emphasis needs to be backed up by giving these committees a simple remit to act solely on behalf of policyholders with FSA rules to support them. It is regrettable that the FSA has not acted on the Treasury Committee's recommendation in this respect.
'There are some things to welcome in the sense that the FSA promises greater transparency and will seek to tighten up reattribution procedures in the light of experience.'
Notes to editors
High resolution images are available from www.vismedia.co.uk Telephone 0207 613 2555
Clare Spottiswoode was appointed policyholder advocate on 21 November 2006.
Norwich Union and Clare Spottiswoode announced agreement of a deal on the reattribution on 30 July. Up to £1 billion would be offered to eligible policyholders to buy out their interests in special distributions from the inherited estates of two of Norwich Union's with-profits funds.
Norwich Union announced a special pre-reattribution distribution (90 per cent to policyholders and 10 per cent to shareholders) of £2.3 billion on 5 February 2008. Payments to policyholders will be made in three stages for those eligible on 1 January 2008, 2009 and 2010.
The Treasury Select Committee announced on 26 February 2008 that it was to hold hearings into the inherited estates. Clare Spottiswoode gave oral evidence to the committee on 22 April 2008. Norwich Union gave oral evidence on 30 April 2008.
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