Pearl Group is to begin distributing its 500m inherited estate to one million with-profits policyholders.
Pearl Assurance’s inherited estate is estimated to be worth more than 500m of the closed with-profits 10bn fund.
Distribution of the inherited estate will be through payouts added on to final bonuses when policies mature, starting from July 2007.
The firm will not be appointing a policyholder advocate to lead the distribution process because FSA conduct of business rules say closed with-profits companies are not required to appoint one.
It says it is leading the closed fund sector in distributing its estate to policyholders in a fair manner.
The FSA has agreed to the group’s plans in principle.
Pearl recently increased the equity-backing ratio of its with-profits fund to 50 per cent in a bid to raise investment returns. The EBR has risen from 25 per cent to 50 per cent over the last 18 months.
Pearl Group executive director Hugh Osmond says: “The release of the estate and the re-risking of Pearl in the last 18 months are both unprecedented in the closed fund sector. This demonstrates how the new skills and techniques that we are applying to closed life books have quite dramatically changed the prospects for Pearl policyholders in a short time.”
Pearl Assurance managing director Jonathan Moss says: “The estate distribution will enable Pearl Group policyholders to benefit from tangible increases in payouts when their policies mature.”