June Update (2)
Dear Policyholder,
This Thursday the Treasury Committee published its report into inherited estates following the public hearings conducted in April this year. Clare has welcomed the report and below you will find the full response we issued to the media. I have also included links to all the media coverage I can find at present.
Yours faithfully,
Jonathan Haslam
director of communications
Media Release 18 June 2008
3 June 2008
Please note that this release is issued under embargo until 00.01 hours Thursday 19 June 2008
Clare Spottiswoode welcomes Treasury Committee report on inherited estates
"This report represents a giant leap forward in bringing clarity to a poorly regulated area and is policyholder focused in marked contrast to the FSA’s approach." Clare Spottiswoode.
Commenting today on the Treasury Committee report on inherited estates, Clare Spottiswoode, policyholder advocate in the proposed Norwich Union reattribution said:
"I am grateful to the Treasury Committee for inquiring into with-profits regulation at such a crucial time. I fully support all its conclusions and recommendations. This is a policyholder focused report and should lead to better and more effective regulation in future. I hope the Financial Services Authority (FSA) responds positively to it.
"The report is carefully considered and brings a clear focus on the uses of the inherited estate where the regulatory framework is wanting and leads to policyholders being treated unfairly.
"The committee has highlighted the importance in a reattribution of the funding of new business and the FSA must now be prepared to defend publicly any decisions it takes in assessing the fairness of reattributions. Also identified in the report is the vital role that the FSA must play in a reattribution, supporting the policyholder advocate, in ensuring that a fair price is offered, not just an adequate one.
"The FSA has announced that it is consulting on whether insurers should continue to be allowed to use inherited estates to pay misselling compensation but this is only one inappropriate use of such funds and the FSA should also have acted on others.
"For example, the committee has recommended that the FSA consults on the charging of shareholder tax to the inherited estate by the end of the year and given its view that it should not be permitted. The charging of shareholder tax to the estate is a particularly muddled area of policy and it is unfortunate that the FSA has not taken determined action when it has had the opportunity to do so in the past.
"I am sure that independent with-profits committees will benefit from the committee’s recommendations on focusing their remit. These committees have a very difficult task to carry out on behalf of policyholders and require a great deal of support. The committee’s view is along the same lines as mine in that with-profits committees should have a simple duty to represent the interests of policyholders.
"The Treasury Committee has brought a spotlight to bear on regulatory failings associated with the with-profits industry. I hope the FSA and the industry have the will to accept the recommendations in the spirit in which they are intended and make a reality of the concept of Treating Customers Fairly. The whole financial services industry will be better off by paying very close attention to this report."
In respect of the current situation with the proposed Norwich Union reattribution Clare Spottiswoode said:
"Discussions with Norwich Union are continuing. We and the company hope that it will not be too many more weeks before we are able to draw matters to a conclusion."
Clare Spottiswoode is available for interview.
Notes to editors
High resolution images are available from www.vismedia.co.uk Telephone 0207 613 2555
Clare Spottiswoode was appointed policyholder advocate on 21 November 2006.
Norwich Union announced a special pre-reattribution distribution (90 per cent to policyholders and 10 per cent to shareholders) of £2.3 billion on 5 February 2008.
Payments to policyholders will be made in three stages for those eligible on 1 January 2008, 2009 and 2010.
The Treasury Select Committee announced on 26 February 2008 that it was to hold hearings into the inherited estates.
Clare Spottiswoode gave oral evidence to the committee on 22 April 2008.
Norwich Union gave oral evidence on 30 April 2008.
More information about the work of the policyholder advocate is available on www.policyholderadvocate.org
End of release
Treasury Committee report
http://www.publications.parliament.uk/pa/cm200708/cmselect/cmtreasy/496/49602.htm
Links to media reports and releases
BBC website report on Treasury Committee
http://news.bbc.co.uk/1/hi/business/7461454.stm
Timesonline
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4167179.ece
Guardian
http://www.guardian.co.uk/money/2008/jun/19/insurance.economy
Daily Telegraph
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/19/cnfsa119.xml
Reuters
http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSL186590920080618
Bloomberg
http://www.bloomberg.com/apps/news?pid=20601102&sid=aj5Cpz.5NzaA&refer=uk
Press Association
http://ukpress.google.com/article/ALeqM5j_gdTE63lzcegLNPVjK3qMl0uBdA
Citywire
http://www.citywire.co.uk/personal/-/news/money-property-and-tax/content.aspx?ID=306107
IFAonline
http://www.ifaonline.co.uk/public/showPage.html?page=800146
Glasgow Daily Record
http://www.dailyrecord.co.uk/news/news-feed/2008/06/19/business-in-brief-city-watchdogs-86908-20612883/
Myfinances.co.uk
http://www.myfinances.co.uk/news/savings-investments/investments/with-profits-funds/fsa-failing-protect-with-profits-policyholders--$1227934.htm
Norwich Union policyholders
http://groups.google.co.uk/group/norwich-union-policyholder-reattribution/browse_thread/thread/72dec89c64b29402?hl=en
Channel 4
http://www.channel4.com/news/articles/business_money/withprofit+fund+regulation+slammed/2291782
Money Marketing
http://www.moneymarketing.co.uk/cgi-bin/item.cgi?id=167189&d=340&h=341&f=342
Other items
Interview with Andrew Moss
http://www.ft.com/cms/s/0/9d0ea754-3c06-11dd-9cb2-0000779fd2ac.html
Clare appearing on Radio 5 Live ‘ Wake up to money’ – you need to go about 15 minutes into the podcast
http://www.bbc.co.uk/radio/aod/mainframe.shtml?http://www.bbc.co.uk/radio/aod/fivelive_aod.shtml?fivelive/wakeup_thu
Please note that the Office of the Policyholder Advocate accepts no responsibility for the content of other websites.
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