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Axa plan may start wave of orphan fund payouts

Plans by Axa to pay former Axa Equity & Law with-profits policyholders £400 windfalls from orphan assets could herald a wave of payouts by life offices.

Both CGNU and Prudential confirm they are considering following Axa&#39s lead.

Research by Schroder estimates life offices have around £44bn in orphan assets. This flies in the face of the commonly touted industry figure of £10bn-£20bn.

CGNU public relations manager Fran Elliott says: “We are carefully considering if a similar arrangement is possible here.”

Prudential media relations manager Jennie Campbell says: “We are in discussions with the FSA on the various options for attributing the estate which is worth between £7bn and £9bn.”

Around 660,000 Axa E&L policyholders could opt for windfalls this autumn by voting to transfer funds from Axa Equity & Law to Axa Sun Life. This would mean relinquishing future bonuses for the £400, meaning Axa would be strengthened by treating the remaining funds as its own.

Axa group chief executive Mark Wood says: “It wouldbe difficult for others to take this model and copy it. Each set of circumstances has tobe looked at separately.”

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