'Churning' & Endowment Complaints

mne2

One question i can't see answered in any of the 'FAQs' etc that i have read on Endowment complaints is whether you are offered compensation including what you would have lost by getting rid of an existing endowment. Does anyone know if this is taken into consideration when coming to a settlement figure ?

defender_of_the_weak

It should definetly be taken in to acount, as usually the churned policy will have been surrendered at a loss at the time and that loss would need to be calculated and brought up to date

dunstonh

Also, pre 1985 policies would have had LAPR (tax relief) on them which is still paid now. Surrendering a pre 1985 policy to go into a post 1985 policy would be frowned upon.

HOWEVER, its not automatic a mis-sale. If the client file shows that you were financially better off by surrendering the old one and going with one new one, then its not a mis-sale. Today, there is a much higher standard and replacement business is documented to a very high level. However, back in the old days, there probably wouldnt be a mention of it. That would work in your favour.

FOSman

non LAPR policy churn redress:

refund of all premiums on churned policy + interest on all premiums to date - SV of churned policy.

If the subsequent policy was also mis-sold, then its RU89 on the rest.