Insurance policy trustee scam ??

Croggilad

Hi all I'll try to be brief as I could fill an encyclopedia with this problem.

My wife and I have a life insurance policy that was arranged by the Yorkshire bank home loans Ltd 40 years ago with Abbey Life insurance. The policy is with profits. Unbeknown to us the bank assigned a trustee to the policy who is named as Mr Rerisby Rotherham. According to Phoenix Life who now administer the policy, he must have been in the employ of the Yorkshire Bank.

We decided that we will cash in the policy and started the ball rolling with Phoenix life. The fact that there is a trustee named on the policy prevents Phoenix from paying out. They are adamant that unless the trustee re assigns the policy back to my wife and I they will not pay us our money.

Our problem is the Yorkshire bank is now Virgin Money and Virgin has been taken over by the Nationwide building society. There is no way we can get Mr Rerisby Rotherham to re assign as no one knows, or ever has known, this individual, we believe he is fictitious and never existed at all. The nearest we have come in our investigations to locate Mr Rerisby Rotherham is coming across a house sale on Rerisby Road, Rotherham which was sold by the Yorkshire Bank in 2014; make of that coincidence what you will !! and bear in mind it has had 47 occupants since 2009.

We have been trying now for 6 weeks to get information and we are totally dizzy with the pass the parcel merrygoround, totally frustrated and have hit a brick wall of indifference from every contact we have made regarding this problem. We have a pot of money which is ours but we may as well not have. I guess our final port of call will be the financial ombudsman. 

I suspect we are not unique with this scenario and would be interested if anyone has been here and solved this total pain, at 70 yo its a pain we could do without.

Keep_pedalling

https://trustsdiscussionforum.co.uk/t/life-policy-held-in-trust-and-trustees-cannot-be-found/4772

dunstonh

They are adamant that unless the trustee re assigns the policy back to my wife and I they will not pay us our money.

It is not your money.  The trust owns the money, and the trustees control it.   So, the insurer is acting incorrectly.

My wife and I have a life insurance policy that was arranged by the Yorkshire bank home loans Ltd 40 years ago with Abbey Life insurance. 

Typically, up to the mid-to-late 1980s, banks and building societies didn't do insurance sales.  Instead, where there was an insurance need, you could use a local agent of your choice or utilise their local arrangement with a local agent.    Often, the bank manager would have agencies with insurance companies, and the manager themselves would be the agent, but it had nothing to do with the bank.   These arrangements ended with regulation that started in 1988.

What is different in your case is that it was an Abbey Life policy.    Abbey Life sold its products via Abbey Life agents, not via brokers (who  later became IFAs in 1988).   I don't believe any bank or building society had any arrangement with Abbey Life to sell their policies prior to regulation.      Although it is possible that the staff member at a bank got a backhander for passing your details to an Abbey Life salesrep.

The nearest we have come in our investigations to locate Mr Rerisby Rotherham is coming across a house sale on Rerisby Road, Rotherham which was sold by the Yorkshire Bank in 2014; make of that coincidence what you will !! 

Seeing as it is Reresby Road rather than Rerisby Road means any connection is unlikely.

 I guess our final port of call will be the financial ombudsman. 

I cannot see the FOS engaging on this other than asking the insurer and bank to see if they have any other information that could help identify the trustee.   They cannot force an insurer to break the law.

Do you have a copy of the trust deed?   
Trust deeds usually outline the terms of trust, including the powers to remove a trustee.
If not, then you are looking at a legal solution via the courts and engagement with a solicitor is your final port of call.

Croggilad

Thanks dunstonh for your reply which I have found very interesting indeed. I can react to some of your comments:

"It is not your money.  The trust owns the money, and the trustees control it.   So, the insurer is acting incorrectly."

We do not know who the trust is. We only have a trustee name which is provided by Phoenix life on our claim form. If this trustee never even existed (as we suspect) are we up the creek without a paddle ? Also considering it is us that paid the premiums surely we have right to the proceeds the policy has accumulated. Isn't that why they send us an annual financial statement ?

"Seeing as it is Reresby Road rather than Rerisby Road means any connection is unlikely."

Sorry that was my spelling shortfall, it should be spelt Reresby, I notice I have even made the same spelling error in my original post I must be more careful in future. 

"Do you have a copy of the trust deed?"

No. We were not aware there was even a trustee assigned. It stopped us dead in our tracks when we were informed of this.

"Typically, up to the mid-to-late 1980s, banks and building societies didn't do insurance sales.  Instead, where there was an insurance need, you could use a local agent of your choice or utilise their local arrangement with a local agent.    Often, the bank manager would have agencies with insurance companies, and the manager themselves would be the agent, but it had nothing to do with the bank.   These arrangements ended with regulation that started in 1988.

What is different in your case is that it was an Abbey Life policy.    Abbey Life sold its products via Abbey Life agents, not via brokers (who  later became IFAs in 1988).   I don't believe any bank or building society had any arrangement with Abbey Life to sell their policies prior to regulation.      Although it is possible that the staff member at a bank got a backhander for passing your details to an Abbey Life salesrep."

This is where things become very sketchy indeed. I have a recollection that an agent visited us at home as I recall choosing where funds should be invested and these are mentioned on our annual statement. Phoenix Life told us verbally that from their records the policy was arranged by The Yorkshire Bank Home Loans Ltd and the trustee was this Mr Reresby Rotherham. I am beginning to think that the lady in customer services at Phoenix Life should  not really have given us that information at all.

As a footnote to this reply I will add that our experience in the complex and complicated financial field is very limited indeed but that does not stop us suspecting there has been some very suspicious practices in the past in relation to this insurance policy. We cant understand why we are even put in this position; it is a life insurance policy administered by Phoenix (formerly Abbey Life) surely that means they should know about the trustee position and at least assist us. 
 

dunstonh

We do not know who the trust is. We only have a trustee name which is provided by Phoenix life on our claim form. If this trustee never even existed (as we suspect) are we up the creek without a paddle ? Also considering it is us that paid the premiums surely we have right to the proceeds the policy has accumulated. Isn't that why they send us an annual financial statement ?

The policy will be in trust and the trust will have a name.
There will be trustees of the trust (mostly likely you, your wife and this third person)
The insurer would have taken a copy of the trust applicaton forms, which is the trust deed, but returned them to you for safekeeping (when I say you, it would be the lead trustee).

You should ask Phoenix Life for a copy of the applications and trust paperwork.  (and keep your fingers crossed that they have a copy).   

 Also considering it is us that paid the premiums surely we have right to the proceeds the policy has accumulated.

No.  The policy owner and the premium payer are not the same thing.    The policy owner and the premium payer can be the same person, but they can be different people.   

This is where things become very sketchy indeed. I have a recollection that an agent visited us at home as I recall choosing where funds should be invested and these are mentioned on our annual statement. Phoenix Life told us verbally that from their records the policy was arranged by The Yorkshire Bank Home Loans Ltd and the trustee was this Mr Reresby Rotherham. I am beginning to think that the lady in customer services at Phoenix Life should  not really have given us that information at all.

If you and your wife are trustees, then you are entitled to full information.  If neither of you is a trustee, then you are not.  However, the trustees would also be the ones to receive the statements.  Not the beneficiaries.

As a footnote to this reply I will add that our experience in the complex and complicated financial field is very limited indeed but that does not stop us suspecting there has been some very suspicious practices in the past in relation to this insurance policy. We cant understand why we are even put in this position; it is a life insurance policy administered by Phoenix (formerly Abbey Life) surely that means they should know about the trustee position and at least assist us. 

They should know who the trustees are, but it's not their responsibility to control the trust.    There is little they can do.  They cannot bust the trust.   

There probably isn't anything dodgy here if both of you are also trustees.   As we are talking about pre-regulation, the agent who sold the policy could well be the third trustee.  Back then, it was not uncommon for insurance agents to be included as a third trustee on a policy in case something happened to the other two.    It isn't something that has been done for very many years, but it was not uncommon back then.   A nice idea in theory, but it assumes the agent will be around for the long term.    That turned out not to be the case when Abbey Life closed for business in 2000.

If neither of you is a trustee, then it becomes a potential missale complaint as you should be a trustee on the plan.

poseidon1

I agree dunstonh's advice to try and obtain a copy of the executed trust deed ( hopefully with Phoenix), to see what powers may have been reserved to the trust settlors ( you and your wife) to appoint additional/replacement trustees.

If you can get hold of a copy deed, and the policy proceeds potentially run to a high 5 figure amount, legal advice from a specialist could make sense.

kingstreet

Do you actually have details of the value of this policy? The kind of contract likely used for loan protection would usually never achieve much of a surrender value as it was likely written on a maximum cover (minimum investment) basis.

Have you used the expression "with profits" from knowledge of the contract, or as a generic expression? Dredging my memory, Abbey Life offered only unit linked funds and had no with profit fund although dunston may be able to apply more recent knowledge than mine...

dunstonh

Have you used the expression "with profits" from knowledge of the contract, or as a generic expression? Dredging my memory, Abbey Life offered only unit linked funds and had no with profit fund although dunston may be able to apply more recent knowledge than mine...

Thats a good call as my recollection is that they were unit linked only.