Endowment surrender ?

Katykat

Sorry if this has been covered prev, but cant find specific thread. Brother in Law claimed compensation for mis sold endowmwnt.( with advice from the Which website) he was pleased with result, but we were concerned because he had to surrender the policy. I filled in an online questionaire from a "company" ( only dipping my toe in the water, no intention of paying them 25% commision).They rang me so I tried to glean as much info as possible from them. They told me I have a good chance of success because I was sold my policy through halifax BS ( ie, still in business and plenty of allocated money) and I DO NOT have to surrender the policy. I get to keep it to maturity in 4 years and pocket all the payout ( it is no longer attached to mortgage which is good because it wouldn't have covered it) ) The 25% commision is only on any compensation. NOW, is this correct? Do I get to continue the policy? Brother in Law was told by endowment company that he had no choice. He was happy with that but I wouldn't be. :A

EdInvestor

AFAIK it shouldn't be a requirement to surrender the policy.

dunstonh

Only time surrender can be enforced is if the policy is voided and should never have existed in any sort from the start. Its not the usual method of correction but pre-sold endowments are one example where voiding the policy and refunding premiums plus interest where it can apply.

They told me I have a good chance of success because I was sold my policy through halifax BS ( ie, still in business and plenty of allocated money) and I DO NOT have to surrender the policy.

Not exactly grounds for complaint!

Katykat

Sorry Dunstonh, didn't make myself clear. The grounds for complaint is that we were not advised that there may be a shortfall, but the guy from the company said that in some cases even that didn't guarantee compensation because if the policy had been sold by an independent advisor, then that person may not now be in a position to claim from ie, may no longer be practising or may even be deceased. Not so with large companies like Halifax.

EdInvestor

This relates to the date the policy was sold.If pre 1988, you can't claim against an IFA or estate agent because this was before the misselling rules were established under the old Financial Services Act.

But before 1988, banks and insurance companies under the law did owe their costomers a "duty of care" and thus they will usually take responsibility for misselling.

If you were missold by an IFA after 1988 and he has gone out of business (in one way or another) then you can claim from the FSCS compensation scheme.

Katykat

Thanks Edinvestor. Yes the policy was taken out in May 1989 when we took out a mortgage with Halifax BS, so far as I am aware, they are still trading in the financial adcice field. With all the advice I've received over this I think we have nothing to lose by claiming Thanks to all.

EdInvestor

Hi jennand

If it was after 1988, then Halifax was probably acting as a "tied agent" of the life company, so your complaint will be against the latter, not Halifax.

Confusing,innit?

blossom30

Hi, I RECEIVED COMPENSATION FROM FRIENDS PROVIDENT AND DIDN'T HAVE TO SURRENDER THE POLICY BUT I DID HAVE TO AGREE THIS WITH THEM FIRST AS THEY PUT FORWARD THE POINT THAT IF I WAS SEEKING COMPENSATION FOR A POLICY THAT WAS UNDER PERFORMING WHY WOULD I WANT TO KEEP IT....I WROTE TO THEM AND SAID I WAS GOING TO KEEP IT AS A SAVINGS PLAN AND THEY WERE OKAY WITH THIS....I DON'T THINK THEY CAN MAKE YOU SURRENDER YOUR POLICY AS THEY DON'T HAVE CONTROL OVER YOUR PERSONAL PAPERS...

dunstonh

I DON'T THINK THEY CAN MAKE YOU SURRENDER YOUR POLICY AS THEY DON'T HAVE CONTROL OVER YOUR PERSONAL PAPERS...

Yes they can, if the complaint is settled in a refund of premiums plus interest. This typically isnt the case with mis-sold endowments where attitude to risk is the issue. It can be though where pre-sold endowments are involved.

defender_of_the_weak

Friends Provident make it a standard condition of acceptance that the policy is surrendered. Their stance is that if the policy is wrong you will want to get rid of it. All of the rest make it an either/or proposition if the policy was bought direct from the insurance company.

With regard to the original posting Halifax were probably tied to Standard Life at the time of the sale so any complaint should go to them.

imacf

Dear EdInvestor,

My Standard Life endowment policy was recommended by an IFA in 1985 - IFA now cannot be located, both Standard Life and FOS state no action can be taken on a complaint. My response to Standard Life was they may have had an obligation to review particlars of sale - they state no such obligation.

I would like to quote back if there is any such "duty of care" liability on Standard Life - any such reference??

Many thanks

EdInvestor wrote:

This relates to the date the policy was sold.If pre 1988, you can't claim against an IFA or estate agent because this was before the misselling rules were established under the old Financial Services Act.

But before 1988, banks and insurance companies under the law did owe their costomers a "duty of care" and thus they will usually take responsibility for misselling.

If you were missold by an IFA after 1988 and he has gone out of business (in one way or another) then you can claim from the FSCS compensation scheme.