Time Bar Pays Dividends

Time Bar Pays Dividends

Life assurance group Chesnara, the holding company for Countrywide Assured plc and City of Westminster Assurance Company Limited, has benefited from the time bar on making mortgage endowment complaints for mis-selling.

Its results for 2007 have improved.

Figures show that pre-tax profits rose 11% to £27.7M in 2007 from £25M in 2006. The significant reduction in endowment complaints allowed for a provision release of £2.8M.

Chesnara Chairman, Christopher Sporborg, said:

"Our recent experience of mortgage endowment mis-selling complaints has been generally positive. The number of complaints has reduced significantly and an increasing proportion of those received are time-barred in line with FSA rules, while uphold rates on those complaints which are not time-barred have increased.

Although we do not believe that this issue has fully run its course, we do feel able, however, whilst maintaining an element of conservatism, to reduce our redress provisions, by £2.8 million, based on our revised expectation of future complaint activity."

It's nice to see that someone can make money out this mess.

Chesnara, which recently demerged from the Countrywide Assured, recently reported that its interim results had been adversely affected by increased provisions of £16.6M for mortgage endowment mis-selling redress.

Reuters report that complaints about endowment policies will hit 2004 profits at Countrywide Assured's life assurance unit. This unit will be demerged, and will start trading as Chesnara on the 25th of May.

The firm is expected to take a £4.8M provision to cover against complaints for endowment policy mis-selling.

Countrywide Assured note that "..the increased level of endowment complaints experienced during January and February 2004 has persisted...".