Bonus Cuts
The Times warns that holders of with profits funds will find that their maturity values will be cut again this year, because of poor performance.
Friends Provident will announce bonuses this week, Norwich Union next week.
Standard Life will declare at the end of this month, with Prudential and Legal & General making their announcements in February.
Many "with profits" (a contradiction in terms) policy holders are of course relying on these policies to pay off their endowment mortgages. A fine example, among many (eg PPI, credit card charges, bank charges, commissions etc), of how the City has ripped off the ordinary British citizen.
Showing posts with label Friends Provident. Show all posts
Showing posts with label Friends Provident. Show all posts
Wednesday, January 07, 2009
Monday, July 21, 2008
Friends Provident Cuts Bonuses
Friends Provident Cuts Bonuses
Those long suffering endowment policy holders who have polices managed by Friends Provident will have been disappointed to learn that it will be slashing the final bonuses it pays to long-term savers.
Friends Provident state that the value of its with-profits fund fell by more than 7% during the first half of the year.
Whilst annual bonuses are being maintained, the final bonuses are being cut. Those in the main with-profits fund are being more than halved.
A policyholder with a 15 year unitised pension plan in the main fund will receive a regular bonus of 4%, but their final bonus will be cut from 18.7% if the policy had matured in January to just 2.1% now.
Those with a 25 year policy will be paid a final bonus of 17.5%, a massive reduction from the original 40% in January.
The ongoing credit crisis and recent falls in the stock market are being blamed. All very well, but what about the previous years when the stock market was booming?
A lousy result for those who have spent years investing in these policies.
Those long suffering endowment policy holders who have polices managed by Friends Provident will have been disappointed to learn that it will be slashing the final bonuses it pays to long-term savers.
Friends Provident state that the value of its with-profits fund fell by more than 7% during the first half of the year.
Whilst annual bonuses are being maintained, the final bonuses are being cut. Those in the main with-profits fund are being more than halved.
A policyholder with a 15 year unitised pension plan in the main fund will receive a regular bonus of 4%, but their final bonus will be cut from 18.7% if the policy had matured in January to just 2.1% now.
Those with a 25 year policy will be paid a final bonus of 17.5%, a massive reduction from the original 40% in January.
The ongoing credit crisis and recent falls in the stock market are being blamed. All very well, but what about the previous years when the stock market was booming?
A lousy result for those who have spent years investing in these policies.
Thursday, March 13, 2008
The Endowment Rip Off
The Endowment Rip Off
Underlying funds held by insurance companies have risen by an average of 6% over the last year. This in theory should be good news for the millions of people holding useless, underperforming with-profits endowment policies.
Unfortunately, as with all endowment policy matters, what at first appears to be an opportunity for the hapless policy holder to earn a respectable return turns out to be an opportunity for the life insurance companies to take "a dip".
The biggest and the "best" of Britain's life insurers have in fact reduced their payouts by 3% last year (remember the funds they "manage" on our behalf have actually risen by 6%).
This cut in payouts has cost the endowment policy holders around £8BN, according to The Times.
The Times quote Tom McPhail, at Hargreaves Lansdown:
"Stock markets have risen substantially since the end of the bear market in 2003, but final payouts keep on falling.
It just doesn't add up."
That's putting it politely!
We would be better off having "invested" our money in a "bog standard" savings account over the last 10 years.
Simple!
Because they can!
Insurers have discretion over how much of the gain they pass on, therefore they choose to keep the money for themselves.
A report for the trade body Actuarial Profession expects payouts to continue to fall by 3% per annum until 2020.
We are being ripped off by the insurance companies, and no one in the regulatory authorities is doing anything about it.
Underlying funds held by insurance companies have risen by an average of 6% over the last year. This in theory should be good news for the millions of people holding useless, underperforming with-profits endowment policies.
Unfortunately, as with all endowment policy matters, what at first appears to be an opportunity for the hapless policy holder to earn a respectable return turns out to be an opportunity for the life insurance companies to take "a dip".
The biggest and the "best" of Britain's life insurers have in fact reduced their payouts by 3% last year (remember the funds they "manage" on our behalf have actually risen by 6%).
This cut in payouts has cost the endowment policy holders around £8BN, according to The Times.
The Times quote Tom McPhail, at Hargreaves Lansdown:
"Stock markets have risen substantially since the end of the bear market in 2003, but final payouts keep on falling.
It just doesn't add up."
That's putting it politely!
We would be better off having "invested" our money in a "bog standard" savings account over the last 10 years.
- A 10 year endowment policy from Friends Provident has returned a mind numbingly small 0.9% a year, compared with 1.6% from a 90 day deposit account.
- Prudential's fund grew by 7.2% last year. However, a typical maturing £50-a-month, 25 year Prudential endowment policy will now pay out £44,515. This represents a 5% cut on the £46,695 paid out on an equivalent plan that matured in 2007.
- A typical 25 year Commercial Union endowment policy will pay out £40,737. This is 7% down on the £43,697 paid out on an equivalent plan last year.
Simple!
Because they can!
Insurers have discretion over how much of the gain they pass on, therefore they choose to keep the money for themselves.
A report for the trade body Actuarial Profession expects payouts to continue to fall by 3% per annum until 2020.
We are being ripped off by the insurance companies, and no one in the regulatory authorities is doing anything about it.
Monday, December 10, 2007
Underwater
Underwater
Scotland on Sunday reports that two of the UK's largest endowment companies, Standard Life and Norwich, now have a staggering 1.4 million endowment policies underwater.
Guardian, which sold endowments for Nationwide, refused to take part in the survey. A spokeswoman for the company claimed that the omission was due to "an administrative oversight".
The report goes on to state that 90% of Norwich Union's 764,609 policyholders are now receiving red letters, while at Standard Life the proportion is 88%. At Friends Provident, 89% are in the red.
It's going to be a bleak Christmas for endowment policy holders.
Scotland on Sunday reports that two of the UK's largest endowment companies, Standard Life and Norwich, now have a staggering 1.4 million endowment policies underwater.
Guardian, which sold endowments for Nationwide, refused to take part in the survey. A spokeswoman for the company claimed that the omission was due to "an administrative oversight".
The report goes on to state that 90% of Norwich Union's 764,609 policyholders are now receiving red letters, while at Standard Life the proportion is 88%. At Friends Provident, 89% are in the red.
It's going to be a bleak Christmas for endowment policy holders.
Monday, May 14, 2007
The List of Shame
The List of Shame
Those of us who are unfortunate enough to have bought an endowment policy in the late 1980's and early 1990's may find an analysis produced by Money Management to be of interest.
It shows that, despite rising stock markets, payouts to policy holder continue to fall in most cases.
They compared policies maturing in 2007 with those maturing in 2006, for a male non smoker investing £50 from the outset over 25 years. The variation in returns was staggering. The average growth rate was 8.5%.
The top performer was Reliance Mutual with a return of 13.6%. However, the laggards showing below average returns were as follows (%):
Norwich Union - 8.3
Canada Life - 8.3
CGU - 8.2
General Accident - 8.2
Brittanic Assurance - 8.2
Clerical Medical - 7.9
Legal&General - 7.7
Scottish Widows - 7.3
Scottish Life - 7.2
Standard Mutual - 6.8
Scottish Mutual - 6.8
Friends Provident - 6.7
Equitable Life - 6.5
Eagle Star - 5.7
Well done!
The key question that policy holders should be asking of their endowment company, if they are in one of the under performing ones, is why are your returns worse than others?
Does that not reflect badly on the quality of management, and on the charges levied against the fund?
Those of us who are unfortunate enough to have bought an endowment policy in the late 1980's and early 1990's may find an analysis produced by Money Management to be of interest.
It shows that, despite rising stock markets, payouts to policy holder continue to fall in most cases.
They compared policies maturing in 2007 with those maturing in 2006, for a male non smoker investing £50 from the outset over 25 years. The variation in returns was staggering. The average growth rate was 8.5%.
The top performer was Reliance Mutual with a return of 13.6%. However, the laggards showing below average returns were as follows (%):
Norwich Union - 8.3
Canada Life - 8.3
CGU - 8.2
General Accident - 8.2
Brittanic Assurance - 8.2
Clerical Medical - 7.9
Legal&General - 7.7
Scottish Widows - 7.3
Scottish Life - 7.2
Standard Mutual - 6.8
Scottish Mutual - 6.8
Friends Provident - 6.7
Equitable Life - 6.5
Eagle Star - 5.7
Well done!
The key question that policy holders should be asking of their endowment company, if they are in one of the under performing ones, is why are your returns worse than others?
Does that not reflect badly on the quality of management, and on the charges levied against the fund?
Monday, October 16, 2006
Secret Payments
Secret Payments
It appears that some major financial institutions, that sold the hapless British home owners their useless and underperforming endowment policies, are conducting a secret "payoff" exercise.
Fearful that their already tarnished reputations will be further dragged through the muck and mire, some of Britain's leading financial institutions are paying off endowment holders, so as to avoid fines from the FSA and further reputational damage.
Included on the list of shame are; Barclays, Halifax, Friends Provident and Legal & General. They are reportedly secretly contacting customers, and offering to "review" the way business has been handled.
Pretty pathetic isn't it?
Hardly surprising that people long ago lost faith in the financial services industry in Britain.
It appears that some major financial institutions, that sold the hapless British home owners their useless and underperforming endowment policies, are conducting a secret "payoff" exercise.
Fearful that their already tarnished reputations will be further dragged through the muck and mire, some of Britain's leading financial institutions are paying off endowment holders, so as to avoid fines from the FSA and further reputational damage.
Included on the list of shame are; Barclays, Halifax, Friends Provident and Legal & General. They are reportedly secretly contacting customers, and offering to "review" the way business has been handled.
Pretty pathetic isn't it?
Hardly surprising that people long ago lost faith in the financial services industry in Britain.
Wednesday, September 06, 2006
Friends Provident In The Wrong
Friends Provident In The Wrong
In a rare piece of good news, it seems that the thousands of endowment policy holders who have been told that they have run out of time to complain about their useless and underperforming mortgage endowment policies have been offered some hope of compensation.
The Financial Ombudsman Service (FOS) has ruled that Friends Provident was wrong to impose a time limit on an endowment misselling complaint bought by a Mr and Mrs Smith, and has ordered the insurer to reopen their case.
The Smiths are physically disabled, and that has impacted the decisions of the FOS. However, endowment claims and legal specialists reportedly believe that this judgement could impact on all policyholders who have been time barred.
Tim Moore, of EndowmentClaims.com, said:
"This ruling suggests that if policyholders can prove that they were too confused, for whatever reason, to make accurate financial choices that the time bar may be invalid."
Under FSA rules, endowment policyholders who want to complain must do so within three years of receiving a "red" warning letter.
The FOS ruled that the Smiths were too confused to make an accurate decision about their mortgage options, as such the time bar was invalid.
The ombudsman is quoted as saying:
"I take the fact that Mr and Mrs Smith are unable to work as a good indication they may find coping with day to day normal life a challenge, and consider their circumstances are exceptional for the purposes of the mortgage endowment time bar rules."
A "coalition" of endowment claims experts including; Donns Solicitors, Endowmentclaims.com, CPH Financial Advisory Services, Whitehall Randall, and Michael Booth QC is reportedly ready to test whether it can be applied to all policyholders, not just the disabled.
Andrew Hummersone, from Whitehall Randall, said:
"In light of this ruling, our next step will be to send another 10 time barred cases to the FOS.
The minute a claim is rejected we will immediately seek a High Court review, with the aim of confirming once and for all whether time bars have any validity."
As ever with the endowment scandal, the lawyers and claim firms will do very well out of it.
However, as I keep repeating, the best way for all of the parties involved in this disgrace would be for the life assurance companies to do the decent thing and bite the bullet of underwriting these useless underperforming policies.
In a rare piece of good news, it seems that the thousands of endowment policy holders who have been told that they have run out of time to complain about their useless and underperforming mortgage endowment policies have been offered some hope of compensation.
The Financial Ombudsman Service (FOS) has ruled that Friends Provident was wrong to impose a time limit on an endowment misselling complaint bought by a Mr and Mrs Smith, and has ordered the insurer to reopen their case.
The Smiths are physically disabled, and that has impacted the decisions of the FOS. However, endowment claims and legal specialists reportedly believe that this judgement could impact on all policyholders who have been time barred.
Tim Moore, of EndowmentClaims.com, said:
"This ruling suggests that if policyholders can prove that they were too confused, for whatever reason, to make accurate financial choices that the time bar may be invalid."
Under FSA rules, endowment policyholders who want to complain must do so within three years of receiving a "red" warning letter.
The FOS ruled that the Smiths were too confused to make an accurate decision about their mortgage options, as such the time bar was invalid.
The ombudsman is quoted as saying:
"I take the fact that Mr and Mrs Smith are unable to work as a good indication they may find coping with day to day normal life a challenge, and consider their circumstances are exceptional for the purposes of the mortgage endowment time bar rules."
A "coalition" of endowment claims experts including; Donns Solicitors, Endowmentclaims.com, CPH Financial Advisory Services, Whitehall Randall, and Michael Booth QC is reportedly ready to test whether it can be applied to all policyholders, not just the disabled.
Andrew Hummersone, from Whitehall Randall, said:
"In light of this ruling, our next step will be to send another 10 time barred cases to the FOS.
The minute a claim is rejected we will immediately seek a High Court review, with the aim of confirming once and for all whether time bars have any validity."
As ever with the endowment scandal, the lawyers and claim firms will do very well out of it.
However, as I keep repeating, the best way for all of the parties involved in this disgrace would be for the life assurance companies to do the decent thing and bite the bullet of underwriting these useless underperforming policies.
Tuesday, May 02, 2006
The Policyholders Fight Back
The Policyholders Fight Back
Congratulations to Vincent Cunningham, who has succeeded in taking his life assurance company to court and winning compensation from them for their underperforming product.
This is reportedly the first case of its kind.
Cunningham has successfully sued Friends Provident for compensation on the shortfall on his policy, even though he failed to make a claim within three years of receiving a 'red warning letter' notifying him of a potential shortfall.
He was awarded £1500 by Reigate county court.
It should be noted that the case does not set a legal precedent, because it was heard in a county court. However, it could have implications for the thousands of hapless endowment policy holders who have been told they had run out of time to make a claim against their endowment providers.
As such, the case may encourage others to take a stand against the life assurance companies who are trying to impose their own time bar.
Where one leads, others will follow!
Here is the judge's ruling Vincent Cunnignham vs Friends Provident.
Congratulations to Vincent Cunningham, who has succeeded in taking his life assurance company to court and winning compensation from them for their underperforming product.
This is reportedly the first case of its kind.
Cunningham has successfully sued Friends Provident for compensation on the shortfall on his policy, even though he failed to make a claim within three years of receiving a 'red warning letter' notifying him of a potential shortfall.
He was awarded £1500 by Reigate county court.
It should be noted that the case does not set a legal precedent, because it was heard in a county court. However, it could have implications for the thousands of hapless endowment policy holders who have been told they had run out of time to make a claim against their endowment providers.
As such, the case may encourage others to take a stand against the life assurance companies who are trying to impose their own time bar.
Where one leads, others will follow!
Here is the judge's ruling Vincent Cunnignham vs Friends Provident.
Friday, January 13, 2006
Guardian Assurance Fined
Guardian Assurance Fined
Guardian Assurance and its associated company Guardian Linked Life have been fined £750K by the Financail Services Authority (FSA) for mishandling endowment complaints.
This is the fourth time that the FSA has fined an insurance company for mishandling complaints.
The FSA said that Guardian's complaints procedure had "serious systemic flaws".
As a result, 5,600 customers had their complaints wrongly rejected, and thus could have lost out on compensation.
Margaret Cole, the FSA's Director of Enforcement, said:
"Guardian failed to treat its customers fairly by exposing those with a valid complaint to the risk that their complaint could be rejected inappropriately.
Consequently, they may not have received the compensation to which they were entitled.
These failings exposed a high number of consumers to potential financial loss."
The FSA role of shame:
-Friends Provident, December 2003, fined £675K
-Dunbar Assurance, March 2004, fined £725K
-Abbey National, May 2005, fined £800K
Between 1988 and 1995 Guardian sold 233,000 endowment policies, before it stopped marketing them.
It received nearly 20,000 complaints from April 2000 to the end of 2004.
At one stage it was rejecting more than three quarters of all its complaints.
I wonder how many other insurance companies are mishandling complaints?
Guardian Assurance and its associated company Guardian Linked Life have been fined £750K by the Financail Services Authority (FSA) for mishandling endowment complaints.
This is the fourth time that the FSA has fined an insurance company for mishandling complaints.
The FSA said that Guardian's complaints procedure had "serious systemic flaws".
As a result, 5,600 customers had their complaints wrongly rejected, and thus could have lost out on compensation.
Margaret Cole, the FSA's Director of Enforcement, said:
"Guardian failed to treat its customers fairly by exposing those with a valid complaint to the risk that their complaint could be rejected inappropriately.
Consequently, they may not have received the compensation to which they were entitled.
These failings exposed a high number of consumers to potential financial loss."
The FSA role of shame:
-Friends Provident, December 2003, fined £675K
-Dunbar Assurance, March 2004, fined £725K
-Abbey National, May 2005, fined £800K
Between 1988 and 1995 Guardian sold 233,000 endowment policies, before it stopped marketing them.
It received nearly 20,000 complaints from April 2000 to the end of 2004.
At one stage it was rejecting more than three quarters of all its complaints.
I wonder how many other insurance companies are mishandling complaints?
Wednesday, May 04, 2005
Time Bar To Bring Chaos
Time Bar To Bring Chaos
Life assurance companies, who sold underperforming and useless endowment policies to 8 million home owners, are using a number of methods to reduce the claims being made against them for compensation.
One such method is the time bar, whereby claimants are given a deadline to complain or lose their right to do so for ever.
This neat little trick is allowed by the Financial Services Authority (FSA), which said that an insurer may disregard a case for mis-selling three years after a policyholder receives the first "red" letter warning that an endowment has a high risk of not meeting its target.
Needless to say, there is now a deluge of complaints swamping the system.
Many hundreds of thousands of red letters were sent out in early 2003, this means that the deadline is now fast approaching for these people to make a claim.
The deluge has been further exacerbated by the fact that the FSA has told the life assurance companies that they must remind people 6 months before the final deadline, as to their right to make a claim.
Needless to say the life assurance companies and the Ombudsman will be hard pressed to cope with this deluge of complaints.
It has taken me over two years to reach the final stage of my claims which, for the record, were both rejected.
Simply put, the system can't cope!
This problem is exacerbated by the fact that, according to Chief Ombudsman Walter Merricks, 45% of endowment mis-selling cases were upheld by his office after being turned down by life companies.
These companies are reportedly issuing time bars:
Norwich Union - it has 1M endowment policyholders. It began warning of a time bar last October, giving 12 months' notice.
Standard Life - it has 1.2M endowment policyholders. It will write to customers in coming weeks to remind them about its deadline, giving 12 months' notice.
Royal & SunAlliance - it has 450K policyholders. It began reminding policyholders about time-barring last May and gives policyholders six months to complain after a second red warning letter.
Allied Dunbar/Eagle Star - it has 100K policyholders. Policyholders have 12 months to complain after receiving second letter.
Friends Provident - it has 450K policyholders. They have imposed a three-year time bar after policyholders receive their first red letter.
Pearl/NPI/London Life - it has 100K policyholders. Time barring applies three years after the first red letter.
Axa - it has 160K endowment policyholders. It introduced time-barring last month and is writing to customers giving 12 months' notice.
Scottish Widows - it has 165K endowment policyholders. It introduced time-barring in February, giving customers 12 months to complain after receiving their second red letter.
Good luck!
Life assurance companies, who sold underperforming and useless endowment policies to 8 million home owners, are using a number of methods to reduce the claims being made against them for compensation.
One such method is the time bar, whereby claimants are given a deadline to complain or lose their right to do so for ever.
This neat little trick is allowed by the Financial Services Authority (FSA), which said that an insurer may disregard a case for mis-selling three years after a policyholder receives the first "red" letter warning that an endowment has a high risk of not meeting its target.
Needless to say, there is now a deluge of complaints swamping the system.
Many hundreds of thousands of red letters were sent out in early 2003, this means that the deadline is now fast approaching for these people to make a claim.
The deluge has been further exacerbated by the fact that the FSA has told the life assurance companies that they must remind people 6 months before the final deadline, as to their right to make a claim.
Needless to say the life assurance companies and the Ombudsman will be hard pressed to cope with this deluge of complaints.
It has taken me over two years to reach the final stage of my claims which, for the record, were both rejected.
Simply put, the system can't cope!
This problem is exacerbated by the fact that, according to Chief Ombudsman Walter Merricks, 45% of endowment mis-selling cases were upheld by his office after being turned down by life companies.
These companies are reportedly issuing time bars:
Norwich Union - it has 1M endowment policyholders. It began warning of a time bar last October, giving 12 months' notice.
Standard Life - it has 1.2M endowment policyholders. It will write to customers in coming weeks to remind them about its deadline, giving 12 months' notice.
Royal & SunAlliance - it has 450K policyholders. It began reminding policyholders about time-barring last May and gives policyholders six months to complain after a second red warning letter.
Allied Dunbar/Eagle Star - it has 100K policyholders. Policyholders have 12 months to complain after receiving second letter.
Friends Provident - it has 450K policyholders. They have imposed a three-year time bar after policyholders receive their first red letter.
Pearl/NPI/London Life - it has 100K policyholders. Time barring applies three years after the first red letter.
Axa - it has 160K endowment policyholders. It introduced time-barring last month and is writing to customers giving 12 months' notice.
Scottish Widows - it has 165K endowment policyholders. It introduced time-barring in February, giving customers 12 months to complain after receiving their second red letter.
Good luck!
Tuesday, April 26, 2005
Fines All Round
Fines All Round
The Financial Services Authority (FSA) has issued a warning that up to 10 endowment firms face disciplinary action, for refusing to pay adequate compensation to customers who were mis-sold policies.
It seems that these 10 firms are still flouting FSA guidelines, which were drawn up 4 years ago, on the handling of endowment complaints.
The FSA is quoted as saying:
"In January we warned the small number of firms that were still not handling mortgage endowment complaints adequately to improve the standard of their work or risk enforcement action. Intensive work is ongoing and the time for these recalcitrant firms to lift their game is certainly short."
It is reported that Abbey National is on the list.
The FSA has already fined Friends Provident £675K and Allied Dunbar £725K for mishandling complaints, in the last 18 months.
Is it any wonder that people have lost confidence in the providers of these worthless products?
The Financial Services Authority (FSA) has issued a warning that up to 10 endowment firms face disciplinary action, for refusing to pay adequate compensation to customers who were mis-sold policies.
It seems that these 10 firms are still flouting FSA guidelines, which were drawn up 4 years ago, on the handling of endowment complaints.
The FSA is quoted as saying:
"In January we warned the small number of firms that were still not handling mortgage endowment complaints adequately to improve the standard of their work or risk enforcement action. Intensive work is ongoing and the time for these recalcitrant firms to lift their game is certainly short."
It is reported that Abbey National is on the list.
The FSA has already fined Friends Provident £675K and Allied Dunbar £725K for mishandling complaints, in the last 18 months.
Is it any wonder that people have lost confidence in the providers of these worthless products?
Wednesday, April 13, 2005
Abbey To Be Fined
Abbey To Be Fined
It seems that Abbey, owned by Banco Santander, is to be fined by the Financial Services Authority (FSA) over its endowment mortgage complaint procedures.
The FSA are now punishing providers for not only mis-selling endowment products, but also for failing to handle the complaints properly.
There have been two firms fined to date for mishandling complaints, Allied Dunbar and Friends Provident, both of which were fined £700K.
Despite warnings from the FSA it seems that a number of providers are content to ignore their duty to investors.
In other words, some life assurance companies don't "give a stuff" about the policy holders.
Complaints to the Financial Services Ombudsman are expected to pass 65,000 in the year to April 2005, and more than 700,000 policies are surrendered short of maturity each year.
It seems that Abbey, owned by Banco Santander, is to be fined by the Financial Services Authority (FSA) over its endowment mortgage complaint procedures.
The FSA are now punishing providers for not only mis-selling endowment products, but also for failing to handle the complaints properly.
There have been two firms fined to date for mishandling complaints, Allied Dunbar and Friends Provident, both of which were fined £700K.
Despite warnings from the FSA it seems that a number of providers are content to ignore their duty to investors.
In other words, some life assurance companies don't "give a stuff" about the policy holders.
Complaints to the Financial Services Ombudsman are expected to pass 65,000 in the year to April 2005, and more than 700,000 policies are surrendered short of maturity each year.
Saturday, January 22, 2005
Tick Tock
Tick Tock
Time is running out for the hapless holders of underperforming, and useless, endowment mortgages to complain over mis-selling.
The life assurance companies will be writing to their policy holders in the coming months, warning them that they have a limited length of time left to complain.
After that, tough luck!
It is reported that Standard Life and Lloyds TSB will shortly be starting their mail shot about this issue.
Norwich Union, will be writing to its 1.1m endowment policy holders in March, reversing its earlier commitment not to impose a time bar.
How nice of them!
Friends Provident and Zurich will also be writing to their policy holders.
Some will allow 6 months to complain, others 12.
The Financial Services Authority (FSA) rules give policyholders three years to complain, after the arrival of an initial letter warning that an endowment has underperformed.
Out of the large firms, only Legal & General and Prudential have not imposed time limits on complaints.
Time is running out for the hapless holders of underperforming, and useless, endowment mortgages to complain over mis-selling.
The life assurance companies will be writing to their policy holders in the coming months, warning them that they have a limited length of time left to complain.
After that, tough luck!
It is reported that Standard Life and Lloyds TSB will shortly be starting their mail shot about this issue.
Norwich Union, will be writing to its 1.1m endowment policy holders in March, reversing its earlier commitment not to impose a time bar.
How nice of them!
Friends Provident and Zurich will also be writing to their policy holders.
Some will allow 6 months to complain, others 12.
The Financial Services Authority (FSA) rules give policyholders three years to complain, after the arrival of an initial letter warning that an endowment has underperformed.
Out of the large firms, only Legal & General and Prudential have not imposed time limits on complaints.
Wednesday, January 05, 2005
A Straw in The Wind
A Straw in The Wind
The Financial Services authority (FSA) has decided that it is now time to "get tough" with the life assurance industry, in respect of the underperforming and useless endowment policies that some 8 million people hold in the UK.
The FSA have written to the chief executives of all companies that sell endowment policies; the letter warns them that, in the opinion of the FSA, they (the life assurance companies) are dismissing complaints from customers without proper investigation.
To date, 500,000 people have complained to insurers and banks; and have received compensation for endowment mortgage mis-selling.
The FSA notes that the Financial Ombudsman Service (FOS) is upholding a large proportion of complaints, that were originally dismissed by the companies that sold the policies; this gives rise to the conclusion that the life assurance companies are not handling the complaints properly.
The FOS now employs 1000 people to handle endowment complaints.
Clive Briault, managing director of retail markets at the FSA, says:
"firms may not be handling complaints properly...Firms should not manage their own caseloads by allowing an excessive number of complaints to flow through to the FOS...".
The FSA has also identified "inconsistencies" in the decisions of some life assurance companies, relating to certain types of complaint.
To date the FSA has fined two companies, for their failure to handle complaints about endowment mortgages properly.
-Allied Dunbar Assurance was fined £725K for serious flaws in March 2004
-Friends Provident was fined £675K for failures in its procedures.
The FSA states that it wants firms to review their policies and procedures for the handling of complaints, and confirm that they are appropriate or take any necessary action.
The FSA will continue to monitor progress and outcomes to assure itself and the public that complaints are being handled fairly, and to act in any cases where it finds weaknesses that put consumers' interests at risk.
There is reportedly a straw in the wind, albeit a rather small one, that indicates that the mood at FSA headquarters is shifting in favour of the hapless endowment policy holder. Namely, that the majority of policies were not mis-bought but mis-sold.
Which? goes one better.
Which? wants the FSA to order a wholesale re-investigation of all rejected complaints, to ensure that people have been dealt with fairly.
Louise Hanson, head of campaigns at Which?, said:
"The FSA must continue to take these bad apples to task by immediately naming and shaming them, and then implementing significant fines where rules have been broken.."
This site fully endorses this suggestion.
The Financial Services authority (FSA) has decided that it is now time to "get tough" with the life assurance industry, in respect of the underperforming and useless endowment policies that some 8 million people hold in the UK.
The FSA have written to the chief executives of all companies that sell endowment policies; the letter warns them that, in the opinion of the FSA, they (the life assurance companies) are dismissing complaints from customers without proper investigation.
To date, 500,000 people have complained to insurers and banks; and have received compensation for endowment mortgage mis-selling.
The FSA notes that the Financial Ombudsman Service (FOS) is upholding a large proportion of complaints, that were originally dismissed by the companies that sold the policies; this gives rise to the conclusion that the life assurance companies are not handling the complaints properly.
The FOS now employs 1000 people to handle endowment complaints.
Clive Briault, managing director of retail markets at the FSA, says:
"firms may not be handling complaints properly...Firms should not manage their own caseloads by allowing an excessive number of complaints to flow through to the FOS...".
The FSA has also identified "inconsistencies" in the decisions of some life assurance companies, relating to certain types of complaint.
To date the FSA has fined two companies, for their failure to handle complaints about endowment mortgages properly.
-Allied Dunbar Assurance was fined £725K for serious flaws in March 2004
-Friends Provident was fined £675K for failures in its procedures.
The FSA states that it wants firms to review their policies and procedures for the handling of complaints, and confirm that they are appropriate or take any necessary action.
The FSA will continue to monitor progress and outcomes to assure itself and the public that complaints are being handled fairly, and to act in any cases where it finds weaknesses that put consumers' interests at risk.
There is reportedly a straw in the wind, albeit a rather small one, that indicates that the mood at FSA headquarters is shifting in favour of the hapless endowment policy holder. Namely, that the majority of policies were not mis-bought but mis-sold.
Which? goes one better.
Which? wants the FSA to order a wholesale re-investigation of all rejected complaints, to ensure that people have been dealt with fairly.
Louise Hanson, head of campaigns at Which?, said:
"The FSA must continue to take these bad apples to task by immediately naming and shaming them, and then implementing significant fines where rules have been broken.."
This site fully endorses this suggestion.
Tuesday, August 24, 2004
The Death of a Thousand Cuts
Yet more cuts in bonus rates have been foisted on endowment policy holders.
This time, it is Friends Provident who give policy holders a kick in the guts; they have reduced their payouts on maturing policies by 3%. This reduction is expected to affect around 1 million endowment policy holders, and is their fourth cut in 18 months.
Reports indicate that, for example, the payout on a £50 per month 25 year endowment will fall from £51K to £48K (in 2003 the same policy was worth £62K).
To my humble view, using a technical term here, these people are simply "taking the piss" out of endowment policy holders.
Friends Provident claim that the reductions will ensure: "that there will be a closer alignment of policy payouts with their underlying investment values."
In other words, the policies are worth "F**k All"; and they, Friends Provident and other life assurance companies, are simply softening up the hapless holders for this bombshell by the death of a thousand cuts.
If you haven't signed my petition yet, then don't you think it is time that you did?
Yet more cuts in bonus rates have been foisted on endowment policy holders.
This time, it is Friends Provident who give policy holders a kick in the guts; they have reduced their payouts on maturing policies by 3%. This reduction is expected to affect around 1 million endowment policy holders, and is their fourth cut in 18 months.
Reports indicate that, for example, the payout on a £50 per month 25 year endowment will fall from £51K to £48K (in 2003 the same policy was worth £62K).
To my humble view, using a technical term here, these people are simply "taking the piss" out of endowment policy holders.
Friends Provident claim that the reductions will ensure: "that there will be a closer alignment of policy payouts with their underlying investment values."
In other words, the policies are worth "F**k All"; and they, Friends Provident and other life assurance companies, are simply softening up the hapless holders for this bombshell by the death of a thousand cuts.
If you haven't signed my petition yet, then don't you think it is time that you did?
Friday, December 19, 2003
I see that the FSA has fined Friends Provident £675K, for unfairly rejecting 5500 complaints about mis-selling of endowment policies.
That is good news for all of us who have had their complaints rejected by other firms.
The FSA have released some stats relating to the complaints they received during 2003.
They received 26000 complaints, each one of which took around 6-8 months to process.
They upheld about a 1/3rd of them.
As I have noted many times before on this blog, given the fact that there are about 5M people who may be in a position to claim; there is going to be an almighty backlog soon!
That is good news for all of us who have had their complaints rejected by other firms.
The FSA have released some stats relating to the complaints they received during 2003.
They received 26000 complaints, each one of which took around 6-8 months to process.
They upheld about a 1/3rd of them.
As I have noted many times before on this blog, given the fact that there are about 5M people who may be in a position to claim; there is going to be an almighty backlog soon!
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