Reattribution and fund transfer
Aviva is continuing to pursue the possibility of a reattribution of the inherited estates of two of its with-profits funds; the CGNU Life and Commercial Union Life Assurance Company (CULAC) with-profits funds.
If the reattribution goes ahead, eligible policyholders will be offered an incentive payment in return for giving up their interests in any possible future payout from the inherited estates.
Aviva's proposals also include a fund transfer, which would transfer all the policies of Commercial Union Life Assurance Company (CULAC), CGNU Life and Norwich Union Life (RBS) Limited to one existing company - Norwich Union Life and Pensions Limited (NULAP).
Further detail on the proposals, including policyholder mailings and a timetable of events can be found at www.norwichunion.com/fundtransfer.
Mark Hodges, chief executive Norwich Union Life.
Clare Spottiswoode, Policyholder Advocate.
Reattribution offer agreed
Aviva is delighted to announce that it has now reached agreement with the Policyholder Advocate that a reattribution offer should be put to policyholders. The agreement means that a potential total pot of £1 billion could be shared amongst eligible policyholders in the CGNU and CULAC with-profits funds provided a reattribution goes ahead. Aviva believes the offer is fair to both policyholders and shareholders.
Norwich Union's Chief Executive and the Policyholder Advocate talk about the reattribution offer announcement. Access their interviews on the right-hand side or below.
The Financial Services Authority (FSA) has carried out an initial review, and has concluded that the offer is fair and should be put to policyholders. It will make its final review once the policyholder election is complete.
We expect to send out voting packs with details of individual offers to eligible policyholders during Winter 2008 - Spring 2009
The Policyholder Advocate's role is to represent policyholders' interests in the proposed reattribution. To find out more please visit her website www.policyholderadvocate.org.
What progress has there been so far?
Norwich Union has reached agreement with the Policyholder Advocate that a reattribution offer should be put to policyholders. The reattribution election is expected to take place during Winter 2008 - Spring 2009.
| What happens next | When |
|---|---|
| Eligible policyholders and pension scheme trustees will be informed of their individual reattribution offers and invited to take part. | Winter 2008 - Spring 2009 |
| Subject to court and board approval, reattribution takes place. CGNU Life With-Profits Fund and CULAC With-Profits Fund transfer into NULAP. | Spring 2009 |
| Payment made to eligible policyholders who accept the reattribution offer | Summer 2009 |
| Related documents |
|---|
| Document Library view |
| Frequently Asked Questions view |
| News releases |
| 30 Jul 08: Aviva announces £1 billion reattribution offer more |
| 26 Feb 08: Update on reattribution of inherited estate more |
| 13 Dec 07: Update by Aviva plc on reattribution process more |
| 21 Nov 06: Clare Spottiswoode appointed as Policyholder Advocate following nomination in February 2006 more |
| 02 Feb 06: Clare Spottiswoode nominated as Policyholder Advocate more |
| Latest interviews |
| 30 Jul 08: Mark Hodges, chief executive Norwich Union Life. |
| Interview view |
| 30 Jul 08: Clare Spottiswoode, Policyholder Advocate. |
| Interview view |
| 19 Dec 06: Mark Hodges, chief executive Norwich Union Life. |
| Interview view |
| Contact Details |
|---|
For journalist enquiries: Press office contacts Office of the Policyholder Advocate |
Explanation of terms
Inherited estate
An inherited estate is money that has built up in a with-profits fund over many years. It is in addition to the expected amount needed to meet current and future policyholder commitments, guarantees and other obligations, such as tax and expenses. The inherited estate is important because it is used to provide:
- security for policyholders against unexpected adverse conditions, such as substantial falls in stock market values,
- investment flexibility and
- the finance that is needed to support the continued writing of new business in the fund.
Please note that the term 'inherited estate' has a specific meaning here. It does not refer to an inheritance received when someone dies or to property of any sort.
Reattribution
A reattribution allows eligible policyholders to choose to receive an incentive payment in return for giving up their interests in any possible future payout from an inherited estate. The payment is made from shareholders’ funds and does not come from the with-profits fund.
With-profits fund
With-profits funds are investment vehicles designed to provide savers with access to stock market investment at lower risk than direct investment in shares. The products that use with-profits are typically regular and singular premium savings plans (endowments and bonds) and pensions.
With-profits funds pool policyholders’ investments, which the insurance company manages and adds bonuses to the value of the policies. The size of these bonuses depends on how well the investments perform and are subject to smoothing. A regular bonus (sometimes known as a reversionary bonus) is added to policies every year. A final bonus may be paid when the investor leaves the fund when the policy ends.
For a full list of terms relating to these proposals, please visit the dedicated website: www.norwichunion.com/fundtransfer