Aviva returns £2.1bn to policyholders
After threatening to withdraw plans to reattribute Norwich Union “orphan” funds, Aviva is proposing to pay out half of the inherited estate (£2.1 billion) to 1.1 million with-profits policyholders.
Aviva’s CGNU Life (which includes General Accident) and CULAC (which includes Commercial Union) with-profits funds have exceed what is required to cover the payouts promised to policyholders on the maturity of their policies.
Bonus payments will be made in three instalments that will increase total policy values by around 10%.
This should give sufficient cash to the 20-25% of policyholders whose projected returns were unlikely to cover their mortgages.
To be eligible for the first instalment, a policyholder would need to have a policy invested in one of the two funds on January 1, 2008. January 1, 2009 and January 1, 2010 are the subsequent cut off dates.
Under the new proposals, shareholders will receive just £230 million of the remaining £5.4 billion surplus over three years.
Negotiations are continuing with Clare Spottiswoode, the policyholder advocate, as to how the remainder of the estate will be shared out.
Aviva’s shareholders want to acquire the rights to the rest of the money but this will need to be negotiated with Ms Spottiswoode.
So far, she has responded to the reattribution proposals by saying that she is disappointed that policyholders will receive their payouts over three years, rather than in a lump sum.
Category: Aviva News, Norwich Union Insurance News
Visited 2368 times, 1 so far today
Comments (0)
Trackback URL | Comments RSS Feed
There are no comments yet. Why not be the first to speak your mind.