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NU threat to halt payouts as orphan cash row grows

Norwich Union says it may halt the reattribution of its £5bn inherited estate if its dispute with policyholder advocate Clare Spottiswoode is not resolved quickly.

The firm denies it is in deadlock in negotiations with Spottiswoode but says the reattribution may have to be scrapped if the talks continue beyond the timescale allotted. Negotiations are due to conclude by the spring so payouts can start by summer.

The dispute centres on what percentage of the inherited estate to be distributed to pol-icyholders and whether it should be used to fund new business, potentially to the detriment of existing policyholders.

The life office says it has given Spottiswoode one extension to the timescale because she wanted to clarify part of the process with the FSA.

Spottiswoode denies she has held up the process. Director of communications at the Office of the Policyholder Advocate Jonathan Haslam says: “We have been continuing to conduct a rigorous process. We want policyholders to get a fair offer. We see no reason why it should take any more time. We will not walk away from an offer but will consider whether it is in policyholders’ interests.”

NU head of media relations David Ross says: “We are optimistic that we will do a deal in the next few weeks or months. We cannot continue negotiations indefinitely as timescales must be met due to costs. In the event that negotiations do not lead to a deal within our timescale, then we will not be able to complete the reattribution process but it is nonsense to say we are walking away from a deal.”

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