How binding is a endowment maturity notice?

DrewE

It was the final settlement quotation of which was accepted on their own official forms. The bank details to which payment should be made were requested by them on that form

The form was for full and final discharge of their liability under the plan. Once signed and returned they stated they will make payment within 7 days.

kingstreet

I'm sorry, I don't understand what a "final settlement quotation" is.

Maturity = policy's natural end date

Surrender = you deciding to wind-up the policy early and take the value.

Was the policy at maturity date, in which case you would be given a maturity quotation and discharge form, or was the policy partway through it's term, so you are/were surrendering it voluntarily?

In which case, you would then have a surrender quotation and the discharge form for that.

Going back to your original post, you suggest you had a maturity projection and somehow expected the insurer to guarantee that three years earlier in a voluntary surrender.

Is that the case?

Would you please set out what you received, what you requested and what issue you have. You may need to escalate this to FOS but TBH it really isn't clear what has taken place.

holly_hobby

This sounds to me that it is a unit linked endowment, that has met target 3 yrs earlier then scheduled maturity.

If that is the case, the firm has offered the OP to either continue the policy to scheduled maturity (issue being if UL the end value will be based on the value of units at the time of maturity), OR to encash now (as its currently at target - again if UL, this fig will be subject to change due to the underlying value of the units held).

But no OP, you can't haggle with the firm on what the policy value is.

And no, if UL they are not bound to honour the current value, if in 3 yrs time, the value of the units means that the maturity value is less than the policy is currently worth. (even if you have maintained premiums and purchased further units).

Hope this helps

Holly

DrewE

They have admitted a mistake!

The policy wasn't due to mature until 2016 but they have sent documents through to the effect that it matured in April of this year.

THEY provided a maturity quotation and discharge form (which was not requested) which was duly signed and returned as in their words "full and final discharge of their liability under the plan"

In my view they have made an offer which was accepted and now they want to change their mind.

It is also my view that that form was sent as a form of contract that states what would be recieved, in return for that full and final discharge of their liability under the plan!

In returning the signed form (contract) as they requested. I believe they should honour the amount as their part of the contract!

I am looking at it from the breach of contract angle, in that they are reneging on a promise!

holly_hobby

DrewE wrote: »

They have admitted a mistake!

The policy wasn't due to mature until 2016 but they have sent documents through to the effect that it matured in April of this year.

THEY provided a maturity quotation and discharge form (which was not requested) which was duly signed and returned as in their words "full and final discharge of their liability under the plan"

In my view they have made an offer which was accepted and now they want to change their mind.

It is also my view that that form was sent as a form of contract that states what would be recieved, in return for that full and final discharge of their liability under the plan!

In returning the signed form (contract) as they requested. I believe they should honour the amount as their part of the contract!

I am looking at it from the breach of contract angle, in that they are reneging on a promise!

The breach of contract would be in seeking to end the contract (ie one aspect being ther term of the endowment), 3 years early than the actual contractual end date (ie 2016) - which they have confirmed is NOT the situation.

What they have stated is that the forms issued to you, were done so in genuine error, and that the policy will not be ending 3 yrs earlier than its contractual terms, but will run to its scheduled end date in 2016 (unless you cease prems or surrender of course).

Their error in despatching and now retracting maturity docs, does not consitutue a breach of contract, but may warrant a small distress and inconvenience payment, if you stamp your feet.

If the policy is unit linked, and currently worth a sum you are happy with, surrender it and save 3 yrs prems and mge interest on the sum (albeit with loss of life cover and any other policy benefits).

If its with profit plan, then its current value of reversionary bonuses won't change between now and maturity, but no further additions can be gted, nor can the payment of any terminal bonus - the only gte of payment at maturity, is the basic sum assured & attaching reversionary bonuses at that time - if you're happy with the current value, surrender it and save 3 yrs prems and mge interest on the sum (notwithstanding the loss of life/other cover and any MEP clause).

Won't be what you want to hear, but it is what it is I'm afraid - a genuine error that the firm have recognised and accordingly withdrawn - I can't see FOS seeing it any differently.

Hope this helps

Holly

ValHaller

DrewE wrote: »

I am looking at it from the breach of contract angle, in that they are reneging on a promise!

Prepare for a bloody nose in court. The contract is what was agreed initially plus all subsequent agreed variations. All you have is an apparent 'promise' which was given in error AFAICS. You'll have to work hard to integrate that 'promise' into the framework of the contract - because stood on its own, a promise is not enforceable.

dunstonh

The FOS understands mistakes happen as do the courts. A mistake does not give you legal entitlement in most cases.

THEY provided a maturity quotation and discharge form (which was not requested) which was duly signed and returned as in their words "full and final discharge of their liability under the plan"

Any surrender form would say the same as well.

In my view they have made an offer which was accepted and now they want to change their mind.

It is not an offer. Investments have a daily value. It isnt a figure created out of thin air. Your entitlement is the surrender value on the given day of surrender or a temporary guarantee period to allow for completion of paperwork (which most providers do not offer).

It is also my view that that form was sent as a form of contract that states what would be recieved, in return for that full and final discharge of their liability under the plan!

Good luck with that one. It is ridiculous idea but it does appear you are not listening to the people giving you sound advice here.

In returning the signed form (contract) as they requested. I believe they should honour the amount as their part of the contract!

They should pay out the value of the investment on the day in question. No more, no less.

I am looking at it from the breach of contract angle, in that they are reneging on a promise!

Problem is that it is you that is breaking the contract. Not them

DrewE

Thanks guys you give me food for thought, although I don't see dunstonh how I can be breaking a contract.

Just my understanding of a contract is...

A contractis an agreement having a lawful object entered into voluntarily by twoor more parties, each of whom intends to create one or more legal obligationsbetween them. The elements of a contract are "offer" and"acceptance" by "competent persons" having legal capacitywho exchange "consideration" to create "mutuality ofobligation."

It is my reading of their letter and form than that is exactly what they have done i.e. made an offer by presenting a maturity value and date, which was then accepted. It is they who proposed a change to the original contract!

This may well be a genuine mistake and morally maybe they shouldn't have to pay but they hid behind the law over this and another policy which was missold a few years back, (causing a 20% shortfall for the mortgage) by their own regional manager of a company they took over. They hid behind the fact that a financial advisor who introduced the regional manager was paid a commission even though this was not known at the time. This advisor was no longer in business and was unable to be traced.

This is merely an exploration to see whether a victory may be gained and I am taking in all of your comments before deciding whther to take it further.

Morally maybe not but Legally is the question.

After all why should we offer morals when they showed none!

holly_hobby

As made clear, you're backing a losing horse on this one.

The Firm are not seeking to breach contract, their system has incorrectly issued maturity documentation, when the policy clearly has 3 yrs to go.

They have acknowledged the fact that this was in error, your policy is not due for maturity until 2016, apologised and effectively retracted the documentation, leaving your policy and the contractual terms unamended.

Morally or legally IMHO there is no where to go with this, bar a nominal D&I payment at best.

Hope this helps, if not what you hoped to hear

Holly x

dunstonh

although I don't see dunstonh how I can be breaking a contract.

You took out an investment contract with a maturity date in 2016. You now wish to break that contract by surrendering it early. That is allowed within the contract terms and for that they will pay you the surrender value applicable for that day.

Sending out the wrong form in error does not give you some automatic entitlement.

This is merely an exploration to see whether a victory may be gained and I am taking in all of your comments before deciding whther to take it further.

I put in a complaint against an insurer that had been giving out the wrong value for over 10 years. Every statement issued was wrong. Every valuation obtained over the phone by the client was wrong and the information I requested in post was wrong. They rejected the complaint. We went to the FOS, the FOS rejected the complaint as at no point had the extra money been an entitlement. The FOS awarded an distress and inconvenience payment but that was all.

It is my reading of their letter and form than that is exactly what they have done i.e. made an offer by presenting a maturity value and date, which was then accepted. It is they who proposed a change to the original contract!

Your maturity date is 2016. Your policy is not maturing. You are breaking the contract by surrendering it early. Not maturing it.