Mark Wood

The UK group chief executive of AXA responds to a leading article that called for legislation to control the way the financial industry deals with its 'orphan' assets
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No one denies that the workings of the financial industry can appear complicated. Life assurers have lessons to learn in simplifying their business, but moves at enhancing transparency have come a long way in recent years. Other elements of our business, such as the current debate on orphan assets, seem impossibly complex; but as is so often the case, the heart of the issue is essentially quite simple. ("Through the looking-glass: Assets in wonderland, 9 September)

No one denies that the workings of the financial industry can appear complicated. Life assurers have lessons to learn in simplifying their business, but moves at enhancing transparency have come a long way in recent years. Other elements of our business, such as the current debate on orphan assets, seem impossibly complex; but as is so often the case, the heart of the issue is essentially quite simple. ("Through the looking-glass: Assets in wonderland, 9 September)

One thing "Alice" might say about orphan assets: "It's more about clarifying who can benefit from them, rather than handing them out." That being said, there are a number of misconceptions about AXA's orphan-asset deal which need correcting:

AXA's orphan assets cannot safely be distributed. As part of the reorganisation, only £250m is being distributed, while the rest (£1.45bn) remains within the fund to support the continued operation of the business.

A financial reorganisation of this sort will always require a court hearing, and AXA welcomes the opportunity for policy-holders to be heard in court. The regulatory process quite properly requires us to present our proposals in court, so we'll be there anyway.

As far as AXA is concerned, there is no "March Hare" around to pluck an alternative scheme out of the air. This is our solution, which has been developed over some four years in conjunction with the regulator, the FSA.

We are confident that our proposals are fair and reasonable, and are happy to work with the Consumers' Association in the expectation that they will arrive at the same conclusion. Something over 260,000 out of the 660,000 policy-holders affected by our proposals have already worked through the scheme and decided to vote in favour.

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