Scottish Provident has announced that buyers of second-hand policies will not be entitled to windfall payments should the insurer demutualise.
The move is an attempt to block so-called “carpetbaggers” who purchase policies solely to take advantage of companies that are pursuing the conversion option.
Standard Life, another insurer recently threatened with demutualisation, passed a similar resolution. It had been pursued by carpetbaggers attempting to obtain windfalls by forcing a vote on conversion.
If Scottish Provident goes ahead with demutualisation, its 400,000 with-profits policyholders are estimated to receive a payment of £2,000 each.