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£365,000 handshake for Reliance chief Bateup

Reliance Mutual has given chief executive John Bateup a golden handshake

of £365,000 despite a solvency crisis.

He was paid the sum last December when Reliance was having to use its

with-profits fund to cover a massive pension misselling liability in

subsidiary the British Life Office.

Free assets then amounted to £5.4m but £5.3m of this was drawn

from future profits, leading industry analyst Ned Cazalet to comment the

life office was “eating next week&#39s supper this week”.

Last December, Reliance Mutual said it had paid around 10 per cent of

funds under management to misselling victims – a move which resulted in its

closing to new business.

No life office has gone bust for 15 years as they are usually acquired

when in dire financial straits.

If Reliance should become insolvent, there would bea levy on all life

offices tomeet payouts.

Cazalet says: “The figures show the scale of the vulnerability. It is by

no means certain the reserving for pension misselling has been completed

and nobody will want to buy it, especially with its poor persistency. There

is also no one behind it to pick up the ball because it is a mutual. It is

a motherless child.”

Mortgage adviser John Charcol has escaped censure for its “bugger” ad

campaign – but has still decided to withdraw the ads. The Advertising

Standards Authority accepted the company&#39s defence that it used the word in

an attempt to be humorous, not offensive. But the firm withdrew the ad

rather than deal with further criticism.

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