The Endowment Diary

The Endowment Diary


The Endowment Mis-selling Debacle - one of the UK's worst financial scandals

Friday, May 15, 2009

Which? Campaign

Which? Campaign

Which? have launched a campaign to lobby the FSA to change its decision re allowing life assurance companies to charge compensation costs for mis-selling endowment policies against inherited estate.

Prudential has taken a staggering £1.6BN from the inherited estate to pay mis-selling costs, while Norwich Union (Aviva) has taken £202M and earmarked another £64M for future claims.

Which? thinks it is outrageous that firms can avoid paying the penalty for their mistakes. The FSA seemed to agree that they should change the rules but have gone back on their original proposals. Now the FSA say that they will only stop firms from charging for mis-selling on policies sold from July this year.

This new rule will be almost meaningless, as hardly any new policies are being sold and firms will be still be able to avoid paying the cost of any new cases that emerge of past mis-selling.

Which? have created template letters which can be completed and sent to MPs and the FSA in less than 2 minutes. They can be accessed via this link Which?

Monday, May 11, 2009

Aviva Halves Offer

Aviva Halves Offer

Aviva (formerly known as Norwich Union) has halved its offer to policyholders for a share of the company's surplus investment funds.

As noted on this site earlier this year, Aviva reneged on last year's offer of £1BN to one million policyholders.


"It is a fair bet that any new offer will be lower, and that Norwich Union will seek ways to delay payment to their policyholders."

The policyholders in two with-profits funds are now being offered £500M of the firm's "inherited estate".

How ironic that Aviva took time out during a rapidly falling market to revise its offer. Cynics might argue that the timing was deliberate, thus ensuring that any payout offered would be reduced.