The High Court has today approved plans for Aviva's reattribution of its inherited estate.
The decision paves the way for the deal to be concluded as scheduled on 1 October and for the vast majority of payments to be made to customers before the end of the year.
Aviva is proposing a windfall of not less than £200 and up to £1,150 - less than originally promised - be paid to with-profits policyholders holding CGNU and Culac policies that were in force on 21 November 2006.
In return beneficiaries will surrender any future interest in the funds' surpluses.
Policyholders have an individual choice on whether they accept a cash offer. Those who vote yes will begin receiving payments in November but they are expected to be well below original estimates because, in May, Aviva cut the total payout to £500m, down from £1bn promised earlier.
Negotiations over the reattribution have taken a couple of years because of a dispute over the proportion of the surplus that should be paid to shareholders.
Policyholder advocate Claire Spottiswoode welcomes the High Court's decision but says FSA rules regarding with-profits surpluses continue to favour shareholders.
"I am delighted that policyholders who voted to accept the cash offer from Aviva can now look forward to receiving their money before the end of the year," she says.
"The reattribution, together with the special distribution payment announced in 2008 means that policyholders will be getting about 70% of the inherited estates. This is more than double the percentage that policyholders were offered in the Axa reattribution of 2000.
"It is also important that policyholders who did not vote to give up their rights to any future special distributions from the inherited estates in exchange for Aviva's cash offer will have their position protected."
Aviva says the next step will take place later this month when it requests final approval for the plans from its Boards.
Aviva UK Life chief executive Mark Hodges says: "We believe the offer represents good value for 99% of our customers and the High Court's approval brings individuals closer to receiving their tax-free payments."
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