Norwich Union - Reattribution

chromehorse

Great news! :beer: there's to be an inquiry into Inherited Estates. It's wide ranging and takes in certain aspects of the management of W-P funds; roles of the IE; role sof PA; role of FSA (hooray):j


Treasury Committee announces new inquiry into Inherited estate and
invites written evidence

New inquiry

The Treasury Committee has decided to undertake an inquiry into the
Inherited estate, held by life assurance companies with-profits
endowment funds.

Invitation to submit written evidence

The Treasury Committee invites written evidence as part of its inquiry
into Inherited estate. Suggested areas which written evidence might
address are given below. Written evidence should reach the Treasury
Committee by 12 noon on Monday 14 April 2008.

Information about topics for written evidence
The Committee would welcome, in particular, written evidence that
relates to the following topics:

The regulatory definition of the inherited estate in a with-profits
fund.

The extent to which life assurance companies should be permitted to
diminish inherited estate in order to subsidise corporate activity,
including financing new business, making strategic investments, paying
shareholder tax and paying the costs of compensation for mis-
selling.

Whether allowing life assurance companies to use inherited estate to
subsidise corporate activity has any adverse effects on competition.

The principles that should guide the division of inherited estates in
90:10 funds between policyholders and shareholders upon reattribution
of the estate.

The appropriate sharing of inherited estate between current and future
policyholders.

Whether policyholders' reasonable expectations of distributions from
inherited estate should be zero or have a positive value.

Whether any distribution of benefits from the inherited estate should
be made in a single payment or phased over several years.

The role and responsibilities of the Policyholder Advocate.

The framework for negotiation between the Policyholder Advocate and
the life assurance companies.

The role of the with-profits committees of life assurance companies.

The approach of the Financial Services Authority to the issue of
inherited estate.

Background to the inquiry
Inherited estate (or "orphan assets") is money that has built up in
with-profits funds. This money accumulates because, from year to year,
insurers can withhold a portion of policyholders' payments to smooth
returns between good and bad years. Despite these funds being
contributed by policyholders, some insurance companies use some of
these funds for the benefit of their shareholders rather than
policyholders. Some insurers have also decided to buy these estates
from policyholders, which has caused consumer concern about the
fairness of the distribution of funds between shareholders and
policyholders. In 2000, AXA paid out 31% of its inherited estate to
policyholders, following which the Financial Services Authority
created the post of Policyholder Advocate. The holder of that post in
respect of Norwich Union policyholders is Claire Spottiswoode, who is
currently engaged in negotiations with Norwich Union about the
proposed distribution of their inherited estate.

Committee Membership is as follows: Rt Hon John McFall (Chairman),
Nick Ainger, Mr Graham Brady, Mr Colin Breed, Jim Cousins, Mr Philip
Dunne, Mr Michael Fallon (Sub-Committee Chairman), Ms Sally Keeble, Mr
Andrew Love, Mr George Mudie, Mr Siôn Simon, John Thurso, Mr Mark
Todd, Peter Viggers.

moira1951

Does that mean we will get more than a few hundred pounds then??
Or even better loads more when policy matures:)

BeeUK

EdInvestor wrote: »

If you are concerned that maturity projections don't include the terminal bonus, you can always find out the surrender value (which does include the TB) and work out a new projection using that.

This probably isn't the best idea...whilst the Surrender Value does contain some TB it uses a different rate usually based on the year you are surrendering in, so not what you may get at maturity.

There is some info on what final bonus would apply on NU's website...

http://www.norwichunion.com/lifefinbonus/

dunstonh

BeeUK wrote: »

This probably isn't the best idea...whilst the Surrender Value does contain some TB it uses a different rate usually based on the year you are surrendering in, so not what you may get at maturity.

There is some info on what final bonus would apply on NU's website...

http://www.norwichunion.com/lifefinbonus/

Yes. Certain providers are well known for bumping out the final bonus on maturity. We have seen maturity notices issued 3 months before maturity showing a figure which then jumps up as much as £15000 on maturity and often turning a shortfall into a surplus.

Also, projecting from the surrender rate does take place with some providers. Standard Life did this for a while and often the lower projection figure was not actually possible because it projected a value lower than the minimum maturity value. The reason was the surrender value includes a penalty which can run into thousands of pounds. If you project from that, you are going to undervalue the likely outcome.

suelees1

Not sure whether this has been mentioned in this thread as there's a lot to trawl through so forgive me if you've heard it before.

The consumer body 'Which' www.which.co.uk is on to this one so it might be
an informative read for those like me who are not particularly au fait with financial language but who are always extremely cynical when such companies blow their own trumpets pretending they're being altruistic.

I'm a member so can access the whole site. I'm sorry but don't know if it's accessible to everyone as my computer allows it to default to me being logged in each time I try. If you can access it just keep clicking to next page in bottom right hand corner of the webpage.

dunstonh

The consumer body 'Which' www.which.co.uk is on to this one so it might be
an informative read for those like me who are not particularly au fait with financial language but who are always extremely cynical when such companies blow their own trumpets pretending they're being altruistic.

Which? are always blowing their own trumpet. It pays to be cynical with them as well. Remember they used to recommend endowment policies as the best option. Funny how they forget that.

suelees1

They must be red faced about that one then

dunstonh

suelees1 wrote: »

They must be red faced about that one then

No. They never make any reference to that fact. Revisionary history is their approach. They frequently recommended Standard Life and anyone who followed their advice didn't have any FOS protection as they bought without regulated advice.

chromehorse

dunstonh wrote: »

No. They never make any reference to that fact. Revisionary history is their approach. They frequently recommended Standard Life and anyone who followed their advice didn't have any FOS protection as they bought without regulated advice.

To be fair to Which? they gallantly opposed - albeit unsuccessfully - the AXA reattribution bare-faced theft in 2001 and have been very active in attackning the NU reattribution scam. If you read their press releases they've been on to the weaknesses and injustices of NU's plans like a shot. they gave evidence to the HoC Treasury Committee about the NU Inherited Estate and you can expect them to be active in the formal inquiry that's just been announced.

norwichpolicyholder

I'm not wishing to "steal" any "trade" from this website, but I'd like to invite any relevant Norwich Union policyholder with a CGNU/CULAC With Profits Fund investment to join our Action Group which can be found here:

http://groups.google.co.uk/group/norwich-union-policyholder-reattribution?hl=en-GB"]http://groups.google.co.uk/group/norwich-union-policyholder-reattribution?hl=en-GB


The group has been campaigning tirelessly on behalf of policyholders for some 16 months. Our website is packed with very useful files and discussions which will help anyone with an interest in this subject to get to grips with the reattribution SCAM.