Standard Life Says It Is On Course
Following on from the previous article about the possibility of Standard Life delaying its planned flotation, because of unresolved issues with the FSA, Standard Life has stated that its plans are on track.
The FSA was reported to have been scrutinising Standard Life's liabilities for its mortgage endowment promise and its endowment complaints, and would need to be satisfied "by the end of this month" if the flotation timetable was to be met.
Standard Life have stated:
"The FSA and Standard Life are in continual dialogue, and that will take place up until the company's IPO (initial public offering.
Any changes that the company has put in place over the last year, the FSA must continuously be satisfied that it can meet its obligations."
They then went on to note that the endowment complaint issue was "a red herring".
They hold a provision for meeting their endowment promise of £393m.
The mortgage endowment promise was introduced in September 2000.
It promised that for the 770,000 customers who faced a shortfall at that time, the deficit would be made up by the insurer, providing underlying assets grew by at least 6% a year after tax.
Those whose policies went into the "amber" or "red" zone after September 2000 were never covered, but the 65,000 whose policies mature before the end of this year will still be topped up in full.
However, Standard Life reneged on its promise; top-ups will still be applied to the remainder, but limited to between 40% and 60% of what was promised.