Points to note on Scottish Equitable deal

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The Independent Online
What are the terms of the deal? Aegon will pay pounds 200m into the with-profit fund in return for an initial interest of 40 per cent in the part of Scottish Equitable's business that concentrates on unit-linked policies. Aegon will put another pounds 40m into Scottish Equitable as share capital.

Is a better offer likely to emerge from elsewhere? This cannot be ruled out, but Scottish Equitable has been discussing this deal with Aegon for nine months. Before this it had tentative discussions without about a dozen other possible partners.

Will policyholders be compensated for loss of mutuality and if so how much will they get? With-profit policyholders will receive a special bonus. Bill Stewart, marketing director of Scottish Equitable, said it would be less than one year's bonus. The money should be added to policies next year.

Should I cash in my policy? No. There is no immediate threat to Scottish Equitable's business and policyholders could suffer early-surrender penalties by bailing out early. With-profit policyholders will miss out on the special bonus if the deal goes through.

What happens next? Policyholders will have to vote on the proposals and documents should be sent out shortly. Scottish Equitable hopes to call a general meeting in June.

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