Norwich Union proposes to simplify the structure of many of its non profit funds by transferring them into Norwich Union Life & Pensions Ltd.
Norwich Union proposes to simplify the structure of many of its non profit funds by transferring them into Norwich Union Life & Pensions Ltd (NULAP). In addition, former Provident Mutual with-profits policies will be transferred to NULAP, and a small number of Norwich Union Linked Life Assurance (NULLA) with-profits policies will be converted to a non profit basis.
In the future, Norwich Union also plans to pay most of its UK pension annuities from Norwich Union Annuity Limited (NUA).
The transfer of these funds and policies will create a simpler and more efficient structure for Norwich Union.
Policyholders will be written to individually regarding the proposed transfer – however they do not need to take any action. Letters to policyholders, together with a questions and answers leaflet, will be despatched from 19 July through to the end of August 2004. Both the letters and leaflets have been written in an easy to understand format and have been consumer tested through research. (Two example letters and an example leaflet are attached).
The main transfer will involve the following funds:
- Norwich Union Linked Life Assurance Limited (including the former business of Provident Mutual Life Assurance Association)
- Fidelity Life Assurance Limited
- TPFL Limited
- CGU Insurance plc*
- Yorkshire Insurance Company Limited*
- CGNU Life Assurance Limited**
- Commercial Union Life Assurance Company Limited (CULAC)**
*Only the long-term insurance policies of these companies will move into NULAP. Their general insurance policies will not be moved or changed as part of this scheme.
** Only the permanent health insurance policies will move to NULAP. Other policies, including with-profits policies, will not be moving as part of this scheme.
The transfer of the funds is subject to a set legal procedure:
- The appointment of an independent expert to prepare a report on the effect of the proposed changes on policyholders’ interests, their reasonable benefit expectations and the security of their policies. The FSA has approved the appointment of the independent expert
- The FSA has reviewed the proposed changes
- Norwich Union will seek final approval of the High Court for the proposed changes
- The court will consider the independent expert’s report, any representations of the FSA and any other representations from interested parties before coming to a decision
- The court will decide whether to approve the changes, taking full account of policyholders’ interests
- If the changes are approved the policy moves are expected to take place on 1 January 2005.
Commenting on the proposed changes, Norwich Union chief actuary, Mike Urmston, said: "The transfer of these funds will considerably simplify the structure of many of our non profit funds. The important message for customers is that they do not need to take any action as a result of the changes. We believe that the changes will bring greater clarity and consistency for policyholders in their contacts with Norwich Union.
"This is not a reattribution of the orphan estate or a merger of the main with-profit funds. Those are issues which we continue to review, however, with the level of regulatory change taking place in the with-profits industry they are not things we envisage progressing in the short-term."
-ends-
Press office contacts:
James Evans 01904 452791 Out of hours 07790 487105
Rob Pell 01904 452659 Out of hours 07968 934091
Louise Soulsby 01904 452617 Out of hours 07810 057362
Notes to editors:
- The details in the press release relate to the main transfer of funds. Full details regarding the whole scheme are available on the website www.norwichunion.com/fundmerger
- The special customer helpline will be available for customers from 19 July 2004
- Norwich Union is the UK's largest insurer. It is the UK's largest provider of life, pensions and investment products and one of the leading IFA providers. IFAs provide around 75% of the company's long-term savings business in the UK
- Norwich Union has strategic alliances with building societies and other leading UK brand names including Tesco Personal Finance and The Royal Bank of Scotland Group
- Norwich Union’s news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media.