Scottish Equitable deal waved through

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SCOTTISH Equitable policyholders gave their managers the green light this week for the mutual life insurance society to be taken over by the Dutch company Aegon, writes Maria Scott.

The terms of the pounds 240m deal must now be approved by Scotland's Court of Session, and the society's management expects the hearing to be in October.

Scottish Equitable hopes the takeover will be formally completed by the end of this year, paving the way for pounds 35m worth of bonuses to be paid to people who have with-profits pension or endowment policies with it. The society has more than 600,000 policies in force, about half of which are with-profits.

Members of the society, which will lose its mutual status as a result of the Aegon deal, voted by more than 95 per cent in favour of the plan at a special general meeting in Edinburgh on Wednesday. Scottish Equitable needed a 75 per cent majority among those voting for its proposal to succeed.

Fewer than 250 people attended the meeting and only 31,376 voted, either by proxy or in person. Scottish Equitable estimates that it has between 450,000 and 460,000 policyholders, a number of whom have several policies.

The vote may therefore seem more like a victory for apathy than for democracy but Scottish Equitable's management did not go completely unchallenged.

One policyholder, London businessman Colin Fisher, proposed a motion at the meeting that the vote be postponed for three months to give members more time to cosnider it. This was defeated by 167 votes to eight.

One of Mr Fisher's main concerns was that policyholders had not been given enough time to consider the proposal.

He claimed the meeting had been packed with Scottish Equitable staff. 'The average age was 28. I think the meeting was almost wholly composed of Scottish Equitable staff who have policies.'

A spokesman for the insurer claimed there was 'a reasonable number of non- staff people'.

Mr Fisher said he was concerned about the power of management in mutual companies to push through their own plans. 'It is too easy for the managers to decide what is in the interests of the society,' he said.

Mr Fisher added that he planned to write to the management of other mutual companies he had policies with to question them about their future plans for the societies.

The size of bonuses payable to Scottish Equitable policyholders after completion of the merger will depend on the type of policy and the time it has been in force. Scottish Equitable has estimated that the value of a 20-year, pounds 25-a-month endowment policy maturing now would have been boosted by pounds 800 as a result of the bonus. A 10-year, pounds 50-a-month policy would have had its maturity value increased by pounds 250.

Bonuses will be paid early next year if the takeover is completed by the end of December.

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