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MGM maintains bonus rates and cuts MVAs

MGM Assurance is leaving regular bonus rates unchanged on its unitised with-profits policies.

The move means bonuses continue at 3 per cent on life funds and 3.5 per cent on pension funds.

The company says the move reflects its ongoing commitment as a mutual to with-profits when many other insurers such as Standard Life, Clerical Medical and Norwich Union have cut their rates.

MGM has also reduced market value adjusters where applicable and is limiting MVAs to 10 per cent for policyholders who took out policies between 1999 and 2000 and who have been hit hardest by the market downturn.

Chief operating officer Neil Walker says: “We believe that as a mutual it is appropriate to share the benefits of a good investment year with our members as quickly as it is prudently possible to do so.”

Chartwell Investment Management business development manager Ben Willis says: “We are told they have maintained their free-asset ratio at a healthy level and they have not got the guarantees and liabilities of some of the bigger players. They called it just about right in the market.”

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