The Prudential is seeking FSA clarification on the ownership of approximately £5.3bn in orphan asset...
The Prudential is seeking FSA clarification on the ownership of approximately £5.3bn in orphan assets from its with-profits fund.
The group denies it is seeking to use the funds to pay out to shareholders, an accusation aimed at Prudential from the Consumers' Association.
The Consumers' Association said that following the FSA's approval to use £1.8bn of the money to help cover a bill of £2bn incurred through pension mis-selling compensation, the Prudential has now entered negotiations with the FSA and Treasury over further inherited assets.
A spokesman at Prudential said: "Firstly this is not an issue that is specific to the Prudential, it is an issue across the whole of the insurance industry.
"Secondly the discussions are not secret, they have been referred to in our interim annual report, so we are very open about them.
"The contents of the discussions are confidential, which is ordinary process for discussions between insurance companies and regulators. The Consumers' Association is confusing attribution with distribution. We haven't talked through how we would distribute the money, the platform is who actually owns the funds, and that is the key point."
She also denied that the funds were "surplus", saying that they underpinned the fund's investment strategy.
Mick McAteer, senior policy advisor at the Consumers' Association, said: "If they get their way it is money that won't be used for policy-holders. It will be used to boost returns. There's no other reason to enter into negotiations otherwise."
He said that both the Treasury and the FSA have refused to discuss the negotiations with the Consumers' Association on the grounds that the negotiations are commercially sensitive.
FSA spokesman Jackie Blyth confirmed that any insurance company seeking to transfer inherited assets to shareholders would first have to seek the approval of the FSA.
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