NU £2.6bn reattribution dispute close to resolution
by Gill Montia
Norwich Union (NU) says it is close to resolving the dispute over the reattribution of the £2.6 billion of surplus capital in its with-profits fund.
A Treasury Select Committee has been reviewing the proposals drawn up by NU’s owner, Aviva, in the light of objections raised by Clare Spottiswoode, who is acting as policyholder advocate.
In recent months, Ms Spottiswoode has been speaking out against Aviva’s proposals for the reattribution, which she regards as generous to shareholders.
She has also criticised the Financial Services Authority’s regulations on reattribution, which she believes are also biased towards shareholders’ interests.
However, Mark Hodges, head of Norwich Union’s UK life business, has now informed MPs that he remains confident that he and Ms Spottiswoode can find the common ground they need to allow the reattribution to go ahead. Failure to do so could result in Aviva abandoning the payout.
The group’s latest offer gives policyholders a cash payout but in return, they may have to agree to waive any right to any future distributions from the inherited estate.
Whether this would be acceptable to Ms Spottiswoode remains to be seen. A decision is expected in the near, rather than distant future, as Mr Hodges has said that he expects negotiations to conclude in weeks rather than months.