Mutuals discuss defence tactics

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The Independent Online
The Government came under renewed pressure yesterday to afford the mutual movement more protection from carpetbaggers as nearly 200 representatives of building societies, mutual insurers, friendly societies and co-operatives met in London to discuss defence measures.

The one-day conference may prove to be the forerunner to the creation of a more formal alliance to promote the benefits of mutual societies over public companies and lobby for action.

Adrian Coles, director general of the Building Societies Association, urged the Government to introduce secondary legislation to make it more difficult for carpetbaggers to seek election to the boards of building societies. Measures could include increasing the number of individuals required to nominate a director, an increase in the amount of money needed to qualify as a nominator and an increase in the turn-out figure required when voting for conversion.

Alastair Lyons, chief executive of National Provident Institution, cautioned: "The voice of mutuality is diverse and that means there is no consistency or coherence in the message. There is an advantage in getting consistency from forums like this." But he said the best defence against takeover or carpetbaggers seeking to force mutuals into conversion was to be competitive. "Mutuals have to demonstrate they add value, not simply act as a protection for inefficient management."

He told delegates that pounds 100 invested every month for 30 years into a with-profits life policy would produce a pot worth pounds 15,000 more in a mutually owned insurer than a plc. "If there is to be a future for mutual life assurers then we have to give greater value for customers than plcs."

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