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's 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's 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
ABI details, p9