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NU will pick an advocate to bid for 3.4bn orphan assets

Norwich Union has stepped up its attempts to reattribute 3.4bn of orphan assets within two of its with-profits funds by moving to appoint a pol- icyholder advocate to look into the deal.

The company says there is no clarity over who legally owns the orphan assets and it is looking at bringing a case to court in the next couple of years in a bid to establish legal ownership.

This follows similar moves by Axa, Pearl and Britannia in recent years. The policyholder advocate, required to provide a balance in any such case since 1995, is likely to be an actuary, retired judge or lawyer.

NU senior actuary John Lister says: “It is clear that the orphan estate does not belong to policyholders but there is no legal clarity of ownership over the assets.”

Which? senior policy adv- iser Mick McAteer says the Government’s decree that distribution of orphan assets should be 90/10 in favour of policyholders means there should be no question marks over ownership. He is concerned that any policyholder advocate would be funded by NU so their ability to influence decisions would be limited.

McAteer says: “This behaviour is only acceptable in the Alice in Wonderland world of with-profits.”

Cazalet Consulting principal Ned Cazalet says in all previous cases, the regulator has stipulated that the orphan assets cannot be removed from the long-term fund, so even if shareholders do get a big share, it is likely to be at least 10 years before they see any of the money.

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