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ABI sets out standards for Omo

The ABI is issuing a statement of good practice recommending minimum

standards for pension providers dealing with policyholders about to retire.

The move aims to pre-empt the FSA&#39s planned new rules for providers which

are set to force them to clearly highlight the open market option, well

ahead of policyholders making their final decision on buying an annuity.

The ABI&#39s statement includes the requirement for companies to explain to

consumers the availability of the Omo and that by shopping around they may

be able to buy an annuity which provides a higher income than that from

their existing provider.

The statement also recommends companies to outline the range of options

available on retirement, including the different types of annuity products

available. It also sets minimum standards for the timing and content of

letters sent to policyholders whose pensions are nearing maturity.

ABI director general Mary Francis says: “For most policyholders, buying an

annuity with the lump sum they have built up in a pension fund will be one

of most important investments they will ever make. The statement will make

sure policyholders have the information they need to make an informed

choice about their annuity.”

The ABI has written to life office chief executives to help them weather

the media storm which has been generated by the Equitable Life crisis,

including its latest bonus rate cuts.

The letter echoes earlier media briefing guidance designed to ensure the

press and public separate the crisis at Equitable Life from with-profits

generally.

ABI details, p9

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