Prudential has taken the first step towards withdrawing funds from its inherited estates by this morning announcing its nomination for a policyholder advocate.
Prudential is thought to have a potential £10bn in inherited estates which could be claimed from the with-profits fund and redistributed to shareholders and policyholders, if the policyholder advocate decides it is in the interests of members and can agree a fair amount for policyholders.
It follows similar moves by Aviva last year to appoint Clare Spottiswoode as its policyholder advocate, to investigate whether it would be beneficial to policyholders to withdraw over £3bn in inherited estates.
While the firm is keen to stress no decision has yet been taken on the reattribution, it is following FSA procedures and has nominated Peter Bloxham, recently retired as a partner at Freshfields Bruckhaus Deringer, as policyholder advocate.
That said, in an early conference call this morning, officials stated it was unlikely they would decide not to claim the reattribution if the nomination was accepted and the PHA subsequently decided it was in the interests of policyholders to accept a deal.
Bloxham will now establish an office and technical team if he is appointed later this year and will consult policyholders on the Pru’s move to claim the inherited assets.
Nick Prettejohn, chief executive of Prudential’s UK insurance operations says:
“If we decide to proceed with a reattribution, Peter will bring extensive practical experience of resolving competing claims to the role of independent policyholder advocate. He is very aware of the customer issues raised by a reattribution and I am sure he will do an excellent job in representing the interests of our with-profits policyholders."
Commenting on his role, Peter Bloxham also adds: "This is a complex project with a considerable amount of information to be analysed and reviewed. My principal task over the coming months will be to familiarise myself with Prudential's with-profits business.
“I would hope to be in a position, subject to being formally appointed, to begin a dialogue with policyholders in the autumn. Should a reattribution proceed I look forward to negotiating on behalf of Prudential's with-profits policyholders to obtain the best possible outcome for them."
In order for policyholders to be eligible for a payout should the reattribution be approved, they need to have been members of the with-profits sub fund on Wednesday 14th March 2007.
It is likely the next stage of the reattribution process will not be announced until Q3, 2007 as Bloxham now has to be formally accepted as an appointed PHA.If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Julie Henderson on 020 7034 2679 or email [email protected].IFAonline
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