Take Offer or Continue with policy - Advice please

dunstonh

I see, so what you're actually saying is that there's likely to be a run on the fund in 2008 and that it could fall into insolvency/administration as a result.

Yes. The potential is there. I have taken tens of millions out of the Pearl Group in the last year or two. I am just an IFA in isolation but not uncommon. With no new business coming in and a massive ongoing outflow showing no signs of slowing down and no ability to levy an MVR, the future could be quite worrying for long term Pearl policyholders. So, although today there is no problem, the future is unknown....

However, when you look at Equitable, which pretty well everyone knows has been insolvent for many years,despite the fact they deny it, it's still standing and still paying out guaranteed values at maturity.

The approach does seem be keep putting it off and hope the investments recover enough to be able to meet the guarantees.

So I wouldn't bet on there being a big drama at Pearl. Since it's now been taken over by a zombie consolidator there's no way anyone will ever know what's going on inside the WP fund ever again anyway.

I don't think there will be. I reckon they will buy another closed insurer and spread the liability. Indeed, if the one they buy has the potential for MVRs, they will probably pass the liability on to them.

However, I could see that mblm might feel he'd be better to take the money and run with this one, rather than risk getting tangled up with any nasty zombie stuff later on. If it were me I would probably take that view.I mean life's too short, don't you think?

Yes, its a case of being able to get out whilst you can.

EdInvestor

I'd forgotten the details about Pearl, so I thought I'd look it up.Oh boy, what a saga :eek: It seems pretty clear that the FSA extracted billions out of AMP - indeed it kept going back for more - and more (and more!) as it delved into the convoluted history of what had happened in the 90s.

Along the way it was discovered ( to the horror of AMP) that the Pearl WP fund had teeth of its own and could bite back.

A somewhat heartening story in its way for all the WP investors who have got ripped off in recent years.

IMHO it's completely impossible to know what will happen here - it's so complicated, I doubt even the best brains in the City and the FSA combined could be truly confident they knew exactly what's what.

This is a salutary tale (not unlike Equitable), showing how With-profits funds can be manipulated and abused without anyone ever really knowing what's going on. It's not before time that they are consigned to the dustbin of history.

I don't think there will be. I reckon they will buy another closed insurer and spread the liability. Indeed, if the one they buy has the potential for MVRs, they will probably pass the liability on to them.

Makes sense.I notice they've been sniffing around Equitable lately,but would it be big enough on its own? Concentrate all the aggro in one spot, so to speak?;)

He's also looking at the zombies at NU and Abbey