Sun Life of Canada's pounds 324m UK blow
Friday 07 August 1998
Behind the provisions were multiple problems stemming from the group's purchase of Confederation Life UK in 1994. The purchase was made after Confederation Life's Canadian parent went out of business.
The group put pounds 114m extra into its UK subsidiaries' reserves to cover promises made by Confed to customers buying personal, group and company pensions before 1994.
The promise guaranteed customers a minimum rate of income when they bought annuities with money saved through Confed's pensions.
But the guarantees relied crucially on long-term interest rates and life expectancy. Since the policies were bought, long-term rates have plummetted and life expectancy has lengthened. That has left SLOC with the prospect of paying more through its annuities than the rest of the market.
A second hit of pounds 110m consisted of a write-down of goodwill stemming from the acquisition of Confed Life UK. The company said it needed to remove an ambiguity about the value of the goodwill on the balance sheet.
The third hit was an extra pounds 100m to cover extra liabilities arising from the review of pension misselling. Sun Life of Canada, fined pounds 600,000 for serious failings in its conduct of the review, has already set aside pounds 177m.
Maurice Bates, chief executive, said: "I am naturally disappointed to have to report exceptional provisions of the order contained in these results.
"However, I believe it is appropriate to face up to the issues and fully provide for them in order to ensure the company is in sound financial shape for the future."
International Women's Day 2014: The shocking statistics that show why it is still so important
Malaysia Airlines: Search for true identity of passengers with stolen passports launched as terrorism concern grows
Singapore sting: Sky-high prices are pushing locals to the edge of affordability
International Women’s Day: 'When a man gives his opinion, he's a man. When a woman gives her opinion, she's a bitch' - feminist quotes from female icons to inspire you
Dead woman's body found sitting in a car after six years after direct debits ran $54,000 bank account dry
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Ukraine crisis: Russia dismisses '3am ultimatum' as 'total nonsense'
If you're horrified by a flame-roasted dog, you should be shocked at a hog roast
Poor 'live like animals' says Boris's privately educated sister after going on 'poverty safari'
White people become less racist just by moving to more diverse areas, study finds
Exclusive: Impact of immigrants on British workers ‘negligible’
- 1 International Women's Day 2014: The shocking statistics that show why it is still so important
- 2 Orgasm machine to deliver climax at the push of a button
- 3 Dear 'The Sun', breast cancer isn't sexy
- 4 Singapore sting: Sky-high prices are pushing locals to the edge of affordability
- 5 Liam Neeson turned down James Bond role because late wife Natasha Richardson said she wouldn't marry him if he took it
iJobs Money & Business
£12000 per annum: Inspiring Interns: The company works with Tier 1 FTSE 100 Ba...
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£37000 - £40000 per annum + £20000 benefits package: Pro-Recruitment Group: **...
£30000 - £35000 per annum + generous benefits: Pro-Recruitment Group: Mixed Ta...