Aviva urges policyholders to vote on orphan assets
Monday 31 August 2009
Aviva is planning a third mass-mailout in a bid to persuade thousands of policyholders to vote on plans to pay out £500m in unclaimed "orphan" assets held in two life insurance funds.
By last Wednesday four-fifths of eligible policyholders had voted on the plans – amounting to around 800,000 people – with 96 per cent in favour.
To get the cash, however, policyholders have to give up rights to future distributions from the £1.2bn surplus held in the CGNU Life and CULAC funds.
A minimum windfall of £200 is being offered, with an average payment of around £500. Nine out of 10 policyholders will receive between £200 and £1,000.
Last week, the insurer extended the deadline for voting to 21 September. The plans will also have to receive approval from the High Court and the Financial Services Authority, and a rubber stamp from Aviva's board.
The £500m is being put up by shareholders to compensate policyholders for giving up their rights to a piece of the £1.2bn surplus.
Those who do not vote, or who vote against, will retain an interest in the surplus cash, but the company has warned that further distributions from the funds are highly unlikely.
The plans were green-lighted by Clare Spottiswoode, who was appointed as a policyholder advocate to represent their interests.
However, the plans are being vigorously opposed by an action group, which argues that policyholders should hold the rights to 90 per cent of the cash with just 10 per cent for Aviva shareholders, in line with the way that returns from with-profits life insurance funds have traditionally been split.
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