Resolution Life endowment cut and run?

Nigel41

I have a with-profits endowment policy with Royal & Sunalliance which is now being taken over by Resolution Life. It has been running since 1988 and due to close in 2013. Should I cash in and re-invest? The word is that all funds are closed and if the terminal bonus is going to be low then is it worth hanging on? I currently pay £69 ppm and feel the money could be better off invested elswhere. I lost big time in the 80's property crash, so I really dont want to luck out again. The policy is no longer linked to a mortgage.

Talos_2

Hi, Cant give any informed advice, but i have just surrendered my with profits with royal & Sun.
Started 1994, £66 per month and was due to be £19k short at maturity(worst case). I bascially looked at the surrender value and calculated how much interest would be saved over the remaining 15 years if i put the lump sum into my offset mortgage. Also by paying the £66 I was paying in premiums also into my offset I calculated i would be better off.
The other factor was that i didnt need the life insurance tied in with the policy, as i had taken out separate cover with a new mortgage.

Incidentally my surrender value was £2k lower than the 10 years worth of payments I had made.

For me it was worth it .

dunstonh

No one is going to tell you to surrender on the public board as there isnt enough information available. You basically need to get all costs and then find out which is the cheapest option for you going forward. It would be wise to assume a less than 4% pa return from R&SA.

Resolution Life are a venture capital company. Now I am not foolish enough to say what Resolution life will do but a venture capital comapny would typically make their profits by living off the fees on the plans, running the business into the ground by making costs as low as possible (such as indian call centres) and keep bonuses at marginally above zero if you are lucky.

Watch out Pearl, NPI and London Life as they are rumoured to be the next targets for these vultures.

jat100

I  also have a with-profits endowment policy with Royal & Sunalliance. and was shocked to read this.  I hadn't heard that it is being taken over by Resolution Life.  Should I have been informed of this by RSA?  

My policy is for 1990 - 2015.  The policy is to pay off a mortgage of £59600 but the shortfall could be as much as £25000 apparently.  I am about to start the complaints procedure for misselling of the endowment policy.  The endowment was sold by an Independent Financial Adviser.  

Questions:
1.  Have Resolution Life already taken over?
2.  Will this affect the endowment policy complaint in any way?
3.  Would it be better to surrender the policy before Resolution Life "run the business into the ground"?  Or would it be better to wait, progress with the complaints procedure and then surrender?

Any help gratefully received.

dunstonh

I also have a with-profits endowment policy with Royal & Sunalliance. and was shocked to read this. I hadn't heard that it is being taken over by Resolution Life. Should I have been informed of this by RSA?

I dont know what RSA have written out to say. Not all of RSA has been sold, only the life and pensions bit. I would have thought something would have been issued though.

My policy is for 1990 - 2015. The policy is to pay off a mortgage of £59600 but the shortfall could be as much as £25000 apparently. I am about to start the complaints procedure for misselling of the endowment policy. The endowment was sold by an Independent Financial Adviser.

When looking at the shortfall, i wouldnt just look at the 4% figure but budget yourself on the absolute minimum of guaranteed sum assured plus current reversionary bonus.

1. Have Resolution Life already taken over?

yes

2. Will this affect the endowment policy complaint in any way?

No, although expect them to close the complaints process under endowment mis selling at the earliest opportunity.

3. Would it be better to surrender the policy before Resolution Life "run the business into the ground"? Or would it be better to wait, progress with the complaints procedure and then surrender?

wait for the complaints process to be completed. Then get an IFA to do an analysis of the costs/benefits of the various options. Just because a company is poor now, doesn't mean you have a bad product. You may have an endowment that had a quite high guaranteed sum assured (and pensions people with RSA may have guaranteed minimum funds or guaranteed annuity rates). Therefore it needs researching before a simple yes or no answer can be given.

Talos_2

I  also have a with-profits endowment policy with Royal & Sunalliance. and was shocked to read this.  I hadn't heard that it is being taken over by Resolution Life.  Should I have been informed of this by RSA?  

I found out about the takeover by chance while scanning ceefax

I recieved a letter from RSA only yesterday informing me of the takeover.

peterbaker

Yes, the letter says RSA sold out to this nefarious never before heard of outfit IN JULY !!!!!

This whole thing stinks to high heaven.

I am extremely glad that I happened to cancel my last policy with RSA just 10 days ago (before I received the letter).

Even before this latest cancellation, RSA forced me earlier this year to surrender four 25 year endowments including one due to mature in January 2005 as a condition of paying the second half of the so -called "mis-selling" compensation they owed me.  This last policy I cancelled was in fact a 1984 flexible whole of life contract called an FPP which was just becoming outrageously expensive because of a constantly "reviewed" mortality structure.

In my opinion, these people have been daylight robbers for some years now and I have warned them in writing that I may yet see them in the small claims court on both the endowment issue and the FPP overcharge issue.  

Royal Insurance and Sun Alliance were THE two biggest British insurers when I worked for Royal UK (the non-life side of the business) in the 1980s.  Then they were merged in the 90s for interesting reasons not lost on their regulating body at the time and now look at them...duh!

Mis-selling is a complete misnomer for what has happened to this industry and I resigned my Chartered Insurer status some years ago in protest of what I saw happening industry wide.  The people that run the industry now are in my opinion worse than you can ever imagine East End "barrer boys" might ever have been if they had gained control of such an important industry.

The abdication of responsibility for long term contracts by respective boards of directors in recent years is in my opinion shameful and despicable.

How the hell has the biggest insurer in the land ended up with the lions share of its endowment business (what they havent already managed to scare off into premature surrenders anyway) being shunted up some dark alley in the full charge of an outfit no-one has ever heard of?

I think it is time some of the people responsible were dragged out of their comfortable early retirements or wherever they are and strung up by little pink round things.  With a complaint correspondence file as thick as mine (starting before I even left Royal after 10 years in 1988 ) I could probably suggest some names for the people the round things are currently attached to.

I was very proud to have studied hard to become a "Fellow of the Chartered Insurance Institute" whilst I was selling insurance for them.  I used the high principles that I had studied every day I was out advising clients.  Now I am completely sickened to think I helped give my employer and the industry credibility on the back of which they sold all their dubious life insurance and investment products in the 80s and especially by this latest complete sell out ahead of the maturity dates of most of those contracts.

JackRS

Obviously I'm behind the game on this one, I have a Royal life policy sold in 1986. I understood that as it was pre 28 August 1988 it was exempt the miss selling claims? Either way I guess it's too late to even try now?

Is it worth calling 'Resolution Life Group' and seeing where i stand or should I go to my current independent(if that's possible) financial advisor?

Does anybody know the telephone number for Resolution Life?

peterbaker

Hi Jack

Do you know what kind of plan you were sold? Was it one of the pretty hollow "Homebuyer" low cost endowments? Or was it a "G Series" or better still "H-Series"? If you have either of the latter two then there is a small chance you may have some some accrued value in your policy which still gives it a fighting chance, but it I emphasise "small chance" - I am guessing. I can tell you for nothing however, that the Homebuyer plan I bought in 1987 was a complete dead duck of a plan.

You are sort of right that you may not have the same level of protection with a 1986 policy as with a post 1988 policy. 1988 was the year that pretty much all sales had to be preceded by a formal "fact-find" exercise and records of the advice given kept on file. A number of the more nefarious "Endowment mis-selling" complaint departments have taken this to mean that because they were not required to do or record any formal fact-find or keep a note of the subsequent advice they gave that it let's them off the hook. I don't believe there is any statute that truly lets these rogues off the hook. Well before they sold the book to Resolution Life, I banged the table hard with Royal Life (that became part of RSA) and got them to accept my complaint regardless based on common law principles. Recently I have discovered that HSBC for one do not deny pre-1988 claims on their Midland Life policies.

I don't know how Resolution Life are conducting themselves. They were promoted (by RSA) as customer friendly at the time RSA wrote extremely late in the day advising of the change. I don't believe that Resolution Life will be customer friendly at all unless the FSA tell them to be.

I would guess that the sharp cookies at RSA sold the book last year knowing that the FSA were cracking down big time on them in 2005. They saw big writing about to appear on the wall. I would guess that Resolution Life was dreamt up by a bunch of industry insiders whose knowledge of the FSA's political intention on endowments was not as sharp as RSA's.

I am currently running endowment complaint files for a friend against three other companies and it is noticeable that they were all anxious to adhere to new FSA guidelines that a formal response to a mis-selling claim (including the offer of compensation if appropriate) should wherever possible be completed within 8 weeks of the initial complaint or else they have to account to the FSA with the reasons they have failed! My own complaint literally took years to get resolved, so these new guidelines are a breath of fresh air. I think it may be worth writing to Royal and SunAlliance (forget Resolution Life's contact details for the moment) and seeing what happens. RSA is very much still in existence (and they bloody well better be because last time I checked, I still had 10 years contributions into a Final Salary staff pension scheme with them which amazingly was still running and not wound up!)

Possible outcomes to your initial complaint letter (keep it brief - "I am writing to complain about the mis-selling of the policy number #....") might be:
1. If their records show that the policy was not sold directly by them, they might pass your complaint to the agent that sold it (not so good), or
2. They will respond telling you how to contact Resolution Life. I doubt they will dare to do this without formally passing on your complaint to Resolution Life so you do not have to write again to kick it off, or
3. They will attempt to deny your claim on the basis that it was a sale pre-1988. I would be surprised if they had agreed to pre-filter pre-1988 claims for Resolution Life in this way, but I guess anything is possible. This would not be a good outcome, but it would at least pre-warn you of the climate before you tackle Resolution Life full on!

I hope you might find these musings helpful. Good luck!

I must state here that I am in no way qualified to offer advice on financial services or investment products of any kind. I just remember a lot about how they were sold by colleagues and I have a few years of complaining about my own policies under my belt!!

philuws

'Watch out Pearl, NPI and London Life as they are rumoured to be the next targets for these vultures.'

Life Company Investor Group Ltd is in the process of taking over these companies. Going through currently.

As for complaints the rumour is coming from the guys in charge at Life company investor group that they will treat complaints in the same way as normal and are not going to adhere to the 'time barring' principle.

Phil

dunstonh

philuws wrote:

'Watch out Pearl, NPI and London Life as they are rumoured to be the next targets for these vultures.'

Life Company Investor Group Ltd is in the process of taking over these companies. Going through currently.

As for complaints the rumour is coming from the guys in charge at Life company investor group that they will treat complaints in the same way as normal and are not going to adhere to the 'time barring' principle.

Phil

It looks unlikley that the ex AMP companies will go to Resolution Life now. Hugh Osborne and his "vulture" capital company look like they have won this one. They upped their initial offer and that has a penalty which Hendersons will have to pay if they decide to go back on the back on it.