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Aviva considers reattribution of inherited estate

Aviva is continuing to pursue the possibility of a reattribution of the inherited estate of two of its with-profits funds and has appointed Clare Spottiswoode as policyholder advocate.

Spottiswoode will represent policyholders and the role was created under new FSA rules governing reattribution but at this stage no decision has been made to proceed with a reattribution.

A reattribution will only take place if there is agreement on a fair outcome for policyholders and shareholders and will apply to the CGNU Life and Commercial Union Life Assurance Company with-profits funds.

Norwich Union says it will be writing to customers in these two funds to notify them of a possible reattribution and a proposed fund transfer. The fund transfer would involve moving NU’s with-profits policies into a single Norwich Union Life company which the life office says would simplify the administration of these funds.

Spottiswoode will begin a formal consultation process with policyholders immediately which will run until the end of February 2007 and will include roadshows across the UK alongside online and telephone research.

Aviva has appointed Watson Wyatt consulting actuary Nick Dumbreck to report independently to the Court on the potential reattribution and fund transfer.

Norwich Union Life chief executive Mark Hodges says: “We will only proceed with a reattribution if it is clear that any negotiated outcome is fair to our policyholders and shareholders. It is important to stress that customers will be completely free to choose whether or not to participate in any offer.”

Spottiswoode says: “My job is to negotiate with Norwich Union the size of payment to eligible policyholders in return for giving up their rights to any possible future distributions from the inherited estates. As part of the process I shall be consulting widely with policyholders and others.”

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