Sauce For The Goose
It is refreshing to read for once a story about a life assurance company suing a broker for mis-selling, rather than an endowment policy holder suing a broker or life assurance company.
In this particular case Standard Life sued brokers Aon for advising it to take out the wrong indemnity insurance, to cover claims for mis-selling of mortgage endowments policies.
I would venture to suggest that had they not mis-sold the policies in the first place, they would not have needed to take the cover out!
Standard Life won the case and stands to gain £75M, the final amount will be determined at another hearing.
The judge ruled that Aon had been negligent, as no reasonably competent broker could have concluded that Standard Life's needs were clearly met by the policy.
I can't but help feel a small amount of shadenfreude over this.
Now at least one life insurance company may know what the millions of us, who were sold these useless underperforming endowments, feel like.
Wednesday, February 27, 2008
Monday, February 18, 2008
Norwich Union - Eligibility For Reattribution Payment
Norwich Union - Eligibility For Reattribution Payment
In order to find out whether your with profits Norwich Union policy is eligible for a Reattribution Payment, please visit this site.
In order to find out whether your with profits Norwich Union policy is eligible for a Reattribution Payment, please visit this site.
Thursday, February 14, 2008
Which? Campaign Against Norwich and Prudential
Which? Campaign Against Norwich and Prudential
Which? has launched a campaign against Norwich Union's and Prudential's plans for reallocating the assets of their respective inherited estates.
Which? does not mince its words, and refers to the schemes as "rip offs".
"Which? is calling on the Financial Services Authority (FSA) to act to prevent £7 billion of with-profits policyholders’ money being 'reallocated' to shareholders.
Without a change in FSA policy, millions of Norwich Union and Prudential policyholders could lose out. Which? believes it is unacceptable for the Government and FSA to stand by and do nothing to stop this smash and grab raid."
Which? are asking for people who hold with profits policies with Norwich Union and Prudential to contact them at withprofits@which.co.uk
I have a policy with Norwich Union, and most certainly be in contact with them.
Which? has launched a campaign against Norwich Union's and Prudential's plans for reallocating the assets of their respective inherited estates.
Which? does not mince its words, and refers to the schemes as "rip offs".
"Which? is calling on the Financial Services Authority (FSA) to act to prevent £7 billion of with-profits policyholders’ money being 'reallocated' to shareholders.
Without a change in FSA policy, millions of Norwich Union and Prudential policyholders could lose out. Which? believes it is unacceptable for the Government and FSA to stand by and do nothing to stop this smash and grab raid."
Which? are asking for people who hold with profits policies with Norwich Union and Prudential to contact them at withprofits@which.co.uk
I have a policy with Norwich Union, and most certainly be in contact with them.
Wednesday, February 06, 2008
Norwich Union Windfall
Norwich Union Windfall
Some good news for over a million Norwich Union endowment policyholders. They have been promised a share of a £2.1BN arising from Norwich's "orphan assets" or "inherited estate" surplus.
Norwich Union has agreed to hand back almost half the £5.4BN surplus in its two main with-profits funds.
Individual payouts will vary, depending on the size of investment and how long it has been in force. However, projections indicate that policyholders should see the value of their assets increase by 10% by 2010.
It is also estimated that approximately 50,000 holders of Norwich Union mortgage endowment policies, currently projected to shortfall, will be reassigned a "green light" over the next three years.
Policyholders will receive 90% per cent of the £2.3 billion being distributed. The remaining 10% will go to shareholders.
Norwich Union have tabled a separate offer of a cash payment to policyholders in exchange for renouncing their claims on the rest of the estate (£3.1BN).
Clare Spottiswoode, the policyholder advocate responsible for securing the best deal for Norwich Union customers, is not entirely happy with the arrangement. She is quoted in the Times as saying:
"The money is available now, so how on earth can it be fair to deny it to policyholders now?"
She also called on Norwich Union to backdate payouts to cover customers who have cashed out of policies since November, when Norwich first said that it would press ahead with a distribution.
IFA's who have paid out compensation, because of Norwich Union's mis-selling of endowment policies, are also not that happy. They are asking why, if the policies now look like thy are going to revert to surplus, should they have been penalised.
Some good news for over a million Norwich Union endowment policyholders. They have been promised a share of a £2.1BN arising from Norwich's "orphan assets" or "inherited estate" surplus.
Norwich Union has agreed to hand back almost half the £5.4BN surplus in its two main with-profits funds.
Individual payouts will vary, depending on the size of investment and how long it has been in force. However, projections indicate that policyholders should see the value of their assets increase by 10% by 2010.
It is also estimated that approximately 50,000 holders of Norwich Union mortgage endowment policies, currently projected to shortfall, will be reassigned a "green light" over the next three years.
Policyholders will receive 90% per cent of the £2.3 billion being distributed. The remaining 10% will go to shareholders.
Norwich Union have tabled a separate offer of a cash payment to policyholders in exchange for renouncing their claims on the rest of the estate (£3.1BN).
Clare Spottiswoode, the policyholder advocate responsible for securing the best deal for Norwich Union customers, is not entirely happy with the arrangement. She is quoted in the Times as saying:
"The money is available now, so how on earth can it be fair to deny it to policyholders now?"
She also called on Norwich Union to backdate payouts to cover customers who have cashed out of policies since November, when Norwich first said that it would press ahead with a distribution.
IFA's who have paid out compensation, because of Norwich Union's mis-selling of endowment policies, are also not that happy. They are asking why, if the policies now look like thy are going to revert to surplus, should they have been penalised.
Wednesday, January 30, 2008
Banned For Life
Banned For Life
Jonathan Leigh Hardie, of Primedale Financial Services, has been banned indefinitely from being a senior manager by the FSA, for refusing to investigate nearly 400 cases of alleged endowment mis-selling.
Primedale Financial Services had been the subject of complaints over a five year period, to May 2006. The Financial Services Authority (FSA) had received 389 complaints over this period about potential endowment mis-selling, out of around 3,000 mortgage endowment policies sold between 1988 and 1999.
The FSA state that Hardie had "already decided that Primedale had never knowingly mis-sold an endowment policy", and refused to assess the claims properly.
The company is now in liquidation, and as a result of the FSA ruling Hardie is banned from entering senior management.
Jonathan Leigh Hardie, of Primedale Financial Services, has been banned indefinitely from being a senior manager by the FSA, for refusing to investigate nearly 400 cases of alleged endowment mis-selling.
Primedale Financial Services had been the subject of complaints over a five year period, to May 2006. The Financial Services Authority (FSA) had received 389 complaints over this period about potential endowment mis-selling, out of around 3,000 mortgage endowment policies sold between 1988 and 1999.
The FSA state that Hardie had "already decided that Primedale had never knowingly mis-sold an endowment policy", and refused to assess the claims properly.
The company is now in liquidation, and as a result of the FSA ruling Hardie is banned from entering senior management.
Sunday, January 20, 2008
FSA Bends In The Wind
FSA Bends in The Wind
The Financial Services Authority (FSA), has given discounts of £4M on fines imposed on banks, building societies, mortgage firms and stockbrokers over the past year.
The firms (eg Nationwide, Capital One and Norwich Union) had been found guilty of serious rule breaches ranging from mis-selling of payment protection insurance (PPI) to failing to adequately safeguard the personal details of customers.
The discounts offered are in the region of 30%, in return for promising to co-operate and not challenging the FSA's findings at tribunal.
Which? is far from impressed, and accuses the FSA of "putting the interests of the industry over those of consumers".
The FSA has decided to bend in the wind as a result of the fight it had with Legal & General in 2005, over its endowments mis-selling case.
L&G successfully appealed against the size of the fine imposed on it.
The FSA is showing excessive weakness, it neglects the fact that were a firm to complain about the size of a fine it would receive an enormous amount of negative publicity during the tribunal.
By offering such large discounts, the FSA has let the insurance and banking industry have its cake and eat it.
The Financial Services Authority (FSA), has given discounts of £4M on fines imposed on banks, building societies, mortgage firms and stockbrokers over the past year.
The firms (eg Nationwide, Capital One and Norwich Union) had been found guilty of serious rule breaches ranging from mis-selling of payment protection insurance (PPI) to failing to adequately safeguard the personal details of customers.
The discounts offered are in the region of 30%, in return for promising to co-operate and not challenging the FSA's findings at tribunal.
Which? is far from impressed, and accuses the FSA of "putting the interests of the industry over those of consumers".
The FSA has decided to bend in the wind as a result of the fight it had with Legal & General in 2005, over its endowments mis-selling case.
L&G successfully appealed against the size of the fine imposed on it.
The FSA is showing excessive weakness, it neglects the fact that were a firm to complain about the size of a fine it would receive an enormous amount of negative publicity during the tribunal.
By offering such large discounts, the FSA has let the insurance and banking industry have its cake and eat it.
Thursday, January 17, 2008
Commercial Union Cut Payouts
Commercial Union Cut Payouts
Those unfortunate endowment policy holders who save with Commercial Union are in for a very unpleasant shock this year.
A saver who put in £50 a month for 25 years from January 1 1983, (from age 29) will receive just £39,321. This is 10% down on the £43,697 paid out on a 25-year plan taken out in January 1 1982.
To add to the misery, it is 19.6% down on the £48,889 paid out two years ago.
The odd thing is the fund, in which these policies are invested, grew by 5.4% last year and 11.7% the year before.
Why the cut the cut then?
Will the senior management of Commercial Union be taking a cut in their bonuses too?
Will Commercial Union be cutting their management charges, given that the fund is not producing the payouts that holders were led to believe it would?
As ever, it the hapless long suffering endowment policy holder that is left to foot the bill for failure not the managers of the endowment company.
Those unfortunate endowment policy holders who save with Commercial Union are in for a very unpleasant shock this year.
A saver who put in £50 a month for 25 years from January 1 1983, (from age 29) will receive just £39,321. This is 10% down on the £43,697 paid out on a 25-year plan taken out in January 1 1982.
To add to the misery, it is 19.6% down on the £48,889 paid out two years ago.
The odd thing is the fund, in which these policies are invested, grew by 5.4% last year and 11.7% the year before.
Why the cut the cut then?
Will the senior management of Commercial Union be taking a cut in their bonuses too?
Will Commercial Union be cutting their management charges, given that the fund is not producing the payouts that holders were led to believe it would?
As ever, it the hapless long suffering endowment policy holder that is left to foot the bill for failure not the managers of the endowment company.
Wednesday, January 16, 2008
Norwich Union Cuts Payouts
Norwich Union Cuts Payouts
This has not been a good week, PR wise, for Norwich Union; and a very bad week for those who hold endowment policies with Norwich Union. Earlier it was reported that Norwich Union was using part of its inherited estate to pay off compensation claims, now it has announced that it is cutting back on payouts.
Norwich Union has 900,000 endowment policy holders, and has announced that despite 4 years of rising stock markets 90% are still in the red zone.
Last year the red zone was 89%.
Norwich Union has now announced a 2% cut in its payout on a typical policy.
The company has 69,000 mortgage endowments that will mature this year, half are expected to fall short by over £1K.
The rather strange thing about the cut in payouts is that the fund in which the policies are invested grew by 5.4%.
Why the cut then?
Will the senior management of Norwich be taking a cut in their bonuses too?
Will Norwich be cutting their management charges, given that the fund is not producing the payouts that holders were led to believe it would?
This has not been a good week, PR wise, for Norwich Union; and a very bad week for those who hold endowment policies with Norwich Union. Earlier it was reported that Norwich Union was using part of its inherited estate to pay off compensation claims, now it has announced that it is cutting back on payouts.
Norwich Union has 900,000 endowment policy holders, and has announced that despite 4 years of rising stock markets 90% are still in the red zone.
Last year the red zone was 89%.
Norwich Union has now announced a 2% cut in its payout on a typical policy.
The company has 69,000 mortgage endowments that will mature this year, half are expected to fall short by over £1K.
The rather strange thing about the cut in payouts is that the fund in which the policies are invested grew by 5.4%.
Why the cut then?
Will the senior management of Norwich be taking a cut in their bonuses too?
Will Norwich be cutting their management charges, given that the fund is not producing the payouts that holders were led to believe it would?
Tuesday, January 15, 2008
Calls For £100K Limit To Be Scrapped
Calls For £100K Limit To Be Scrapped
IFAOnline reports that the Financial Ombudsman Service (FOS) has been told by the All Party Parliamentary Group on Insurance and Financial Services (APPGIFS) to scrap or substantially raise its £100K compensation limit.
APPGIFS says the existing limits on awards, that were established over 25 years ago, have not increased in line with financial transactions carried out by retail and small business customers.
The FOS has been heavily involved in the endowment policy scandal.
IFAOnline reports that the Financial Ombudsman Service (FOS) has been told by the All Party Parliamentary Group on Insurance and Financial Services (APPGIFS) to scrap or substantially raise its £100K compensation limit.
APPGIFS says the existing limits on awards, that were established over 25 years ago, have not increased in line with financial transactions carried out by retail and small business customers.
The FOS has been heavily involved in the endowment policy scandal.
Friday, January 11, 2008
Norwich Union's Sleight of Hand
Norwich Union's Sleight of Hand
It seems that Norwich Union is planning an interesting use of £150M of its inherited estate (orphan funds), which in theory are meant to be for the benefit of its policy holders.
Norwich plans to use £150M of £5BN surplus assets to pay for claims made against the company.
Currently Norwich Union is in the process of re attributing the funds to with-profits policyholders and shareholders, which is perfectly reasonable. However, Which? has warned that £150M has been designated to pay for past mis-selling.
It should be noted that the Financial Services Authority (FSA) does allow money in with-profits funds to be used in a number of ways, including settling compensations claims. It is considering a change in its regulations.
However, it seems to be rather "sharp practice" to use policy holders' money to pay for mis-selling perpetrated by the company that claims to be acting in the interest of the policy holders.
Which? is of the same opinion, and has quite rightly threatened to take the matter to court.
Norwich Union is negotiating the re attribution of the £5BN surplus, and also wants to use some of the money to finance business expansion; which also seems to me to be taking a liberty with policy holders' funds.
Dominic Lindley, financial policy adviser to Which?, is also claiming that billions of pounds of with-profits money has already been used by insurance companies to pay for the mis-selling of endowments and pensions.
What are the FSA doing about this?
Why do they sit on their hands and allow companies, such as Norwich Union, to get away with this?
It seems that Norwich Union is planning an interesting use of £150M of its inherited estate (orphan funds), which in theory are meant to be for the benefit of its policy holders.
Norwich plans to use £150M of £5BN surplus assets to pay for claims made against the company.
Currently Norwich Union is in the process of re attributing the funds to with-profits policyholders and shareholders, which is perfectly reasonable. However, Which? has warned that £150M has been designated to pay for past mis-selling.
It should be noted that the Financial Services Authority (FSA) does allow money in with-profits funds to be used in a number of ways, including settling compensations claims. It is considering a change in its regulations.
However, it seems to be rather "sharp practice" to use policy holders' money to pay for mis-selling perpetrated by the company that claims to be acting in the interest of the policy holders.
Which? is of the same opinion, and has quite rightly threatened to take the matter to court.
Norwich Union is negotiating the re attribution of the £5BN surplus, and also wants to use some of the money to finance business expansion; which also seems to me to be taking a liberty with policy holders' funds.
Dominic Lindley, financial policy adviser to Which?, is also claiming that billions of pounds of with-profits money has already been used by insurance companies to pay for the mis-selling of endowments and pensions.
What are the FSA doing about this?
Why do they sit on their hands and allow companies, such as Norwich Union, to get away with this?
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