Norwich Union has conducted a review of the way it discloses its charges and total expense ratios (TERs)*. As a result of the review, the company has discovered that, on some of its unit linked funds, not all charges were correctly disclosed to policyholders.
Norwich Union has conducted a review of the way it discloses its charges and total expense ratios (TERs)*. As a result of the review, the company has discovered that, on some of its unit linked funds, not all charges were correctly disclosed to policyholders.
To correct this, Norwich Union will be refunding the undisclosed charges back to affected customers by increasing their individual policy value. This will mean that around 70,000 policyholders will see an increase in their policy value which will be, on average, Ł90.
These policyholders were correctly informed about the annual management charges, however, the other charges, which together make up the TER, were not correctly disclosed. Going forward, Norwich Union will absorb these undisclosed charges on the affected funds for these policyholders.
Norwich Union will be writing to affected customers in the next three months to advise them of this and to inform them when their policy value will be increased. Customers should wait to receive their letter from Norwich Union and do not need to take any action themselves.
* The TER represents all the costs declared by the fund manager, including the annual management charges and expresses them as an annual percentage.
For those affected customers who have since left the funds, Norwich Union will be contacting these people to refund the undisclosed charges. This refund will be by cheque.
New investments
New investments into the affected funds will benefit from Norwich Union absorbing the charges above the annual management charges, which, together make up the TER. This approach will continue until Norwich Union launches new funds - expected to be December 2005 for investments and March 2006 for pensions. For Norwich Union International Limited, new investments funds will be launched from 30 May 2005.
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Press office contacts:
James Evans 01904 452791 Out of hours 07800 699525
Rob Pell 01904 452659 Out of hours 07800 699563
Notes to editors
- The charges that were not correctly disclosed were mainly the published TER expenses in respect of collective investment vehicles used by some of our funds such as: administration, service, audit and regulatory fees that can be charged directly to fund.
- Norwich Union is the UK’s largest insurer. It is a leading provider of life, pensions and investment products and one of the leading IFA providers. IFAs provide around 70% of the company’s long-term savings business.
- Norwich Union has strategic alliances with building societies and other leading UK brand names including Tesco Personal Finance and The Royal Bank of Scotland Group.
- Norwich Union’s news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media.