Aviva reconsiders NU reattribution
by Gill Montia
Story link: Aviva reconsiders NU reattribution
Aviva, the parent company of Norwich Union, is reported to be considering putting off plans to reattribute a £5 billion surplus from its Norwich Union with-profits funds.
The insurer is concerned that plans that could have benefited 1.1 million Norwich Union shareholders have led to adverse publicity that could damage the group’s reputation.
Currently negotiations are taking place between Aviva and the policyholder advocate, Clare Spottiswoode, but Ms Spottiswoode is not satisfied with Aviva’s proposals.
The post of policyholder advocate was created by the Financial Services Authority (FSA) but FSA regulations allow such surpluses to be used in ways that have been described by Ms Spottiswood as unfair to policyholders.
For example, the money can be used by Aviva for business development and even to pay compensation claims for mis-selling policies.
Negotiations are not progressing because Ms Spottiswoode and Aviva cannot agree how much of the money can be ring-fenced for insurer’s own purposes.
Meanwhile, Which?, the consumer group, has threatened to take court action if Aviva proceeds with a reattribution that favours shareholders and the company at the expense of policyholders.