Article date: 13 July 2004
Norwich Union proposes to simplify the structure of many of itsnon profit funds by transferring them into Norwich Union Life &Pensions Ltd (NULAP). In addition, former Provident Mutualwith-profits policies will be transferred to NULAP, and a smallnumber of Norwich Union Linked Life Assurance (NULLA) with-profitspolicies will be converted to a non profit basis.
In the future, Norwich Union also plans to pay most of its UKpension annuities from Norwich Union Annuity Limited (NUA).
The transfer of these funds and policies will create a simplerand more efficient structure for Norwich Union.
Policyholders will be written to individually regarding theproposed transfer – however they do not need to take anyaction. Letters to policyholders, together with a questions andanswers leaflet, will be despatched from 19 July through to the endof August 2004. Both the letters and leaflets have been written inan easy to understand format and have been consumer tested throughresearch. (Two example letters and an example leaflet are attached).
The main transfer will involve the following funds:
- Norwich Union Linked Life Assurance Limited (including theformer business of Provident Mutual Life AssuranceAssociation)
- Fidelity Life Assurance Limited
- TPFL Limited
- CGU Insurance plc*
- Yorkshire Insurance Company Limited*
- CGNU Life Assurance Limited**
- Commercial Union Life Assurance Company Limited (CULAC)**
*Only the long-term insurance policies of these companies willmove into NULAP. Their general insurance policies will not be movedor changed as part of this scheme.
** Only the permanent health insurance policies will move to NULAP.Other policies, including with-profits policies, will not be movingas part of this scheme.
The transfer of the funds is subject to a set legalprocedure:
- The appointment of an independent expert to prepare a reporton the effect of the proposed changes on policyholders’interests, their reasonable benefit expectations and the securityof their policies. The FSA has approved the appointment of theindependent expert
- The FSA has reviewed the proposed changes
- Norwich Union will seek final approval of the High Court forthe proposed changes
- The court will consider the independent expert’s report,any representations of the FSA and any other representations frominterested parties before coming to a decision
- The court will decide whether to approve the changes, takingfull account of policyholders’ interests
- If the changes are approved the policy moves are expected totake place on 1 January 2005.
Commenting on the proposed changes, Norwich Union chief actuary,Mike Urmston, said: "The transfer of these funds will considerablysimplify the structure of many of our non profit funds. Theimportant message for customers is that they do not need to takeany action as a result of the changes. We believe that the changeswill bring greater clarity and consistency for policyholders intheir contacts with Norwich Union.
"This is not a reattribution of the orphan estate or a merger ofthe main with-profit funds. Those are issues which we continue toreview, however, with the level of regulatory change taking placein the with-profits industry they are not things we envisageprogressing in the short-term."
Press office contacts:
James Evans 01904 452791 Outof hours 07790 487105
Rob Pell 01904 452659 Out of hours 07968 934091
Louise Soulsby 01904 452617 Out of hours 07810 057362
Notes to editors:
- The details in the press release relate to the main transferof funds.
- The special customer helpline will be available for customersfrom 19 July 2004
- Norwich Union is the UK's largest insurer. It is the UK'slargest provider of life, pensions and investment products and oneof the leading IFA providers. IFAs provide around 75% of thecompany's long-term savings business in the UK
- Norwich Union has strategic alliances with building societiesand other leading UK brand names including Tesco Personal Financeand The Royal Bank of Scotland Group
- Norwich Union’s news releases and a selection of imagesare available from Aviva's internet press centre at www.aviva.com/media.