The payments for the new offer will come from Aviva’s shareholder funds and will be flexible to reflect fluctuations in the value of the inherited estate up until the reattribution in September 2009, but there will be a minimum payment of £200 for policyholders.
Aviva expects the majority of the one million policyholders to receive between £200 and £1150, but the payouts will be based on the average value of the inherited estate between June and August with the final calculation made before a High Court hearing.
Individual policyholders will also have the choice over whether to accept the cash rather than the decision being based on a majority vote.
If they choose not to accept the offer they can continue to receive bonuses from their with-profits funds.
Aviva says the latest valuation puts the inherited estate at £1.2bn.
Policyholder advocate Clare Spottiswoode welcomed the deal given the turmoil in the financial markets that affected the plan announced last year.
She says: “This offer is also good for the great majority of policyholders under the FSA’s current rules.
“The Aviva proposal shows that together we have found an imaginative way of keeping the reattribution in place which includes the opportunity for policyholders to benefit from any increase in the estates.
“Policyholders who decide not to accept the offer and keep their rights to future special distributions are also protected.”
Aviva UK Life chief executive Mark Hodges says: “This is a good deal for our customers and shareholders.
“We’ve worked hard with Clare and her team to come up with a flexible offer which accommodates the exceptional market conditions but still represents good value for the vast majority of our eligible customers.”