View more on these topics

Phoenix escapes extra with-profits payments after High Court ruling

FSA Front Door 480

Phoenix has avoided paying more money to 22,000 with-profits customers following a decision in the High Court.

The “co-operative litigation” between the provider and the FSA focused on how a guaranteed annuity offered as part of a with-profits bond was calculated.

The ‘Freedom’ bond promised policyholders a guaranteed nominal capital sum which would pay towards a guaranteed level of annuity. If the capital sum was lower than the annuity, Phoenix would pay the difference.

The case was brought to clarify whether the nominal capital sum should include bonus payments. The FSA argued that it shouldn’t while Phoenix said it should. The court ruled in favour of Phoenix.

Mr Justice Andrew Smith said: “I uphold Phoenix ‘s interpretation of the Freedom Bond…to my mind there can be no real doubt about the proper interpretation of the Freedom Bond on the point in issue. It seems to me clear from the wording of the bond itself, given the nature of the instrument.”

An FSA spokesman says: “The FSA entered into ‘co-operative’ litigation with Phoenix Life Assurance in relation to an insurance policy sold by Pearl Assurance.

“We had been in discussions with Phoenix in relation to how this product operates and considered that there was sufficient uncertainty regarding the wording of the insurance policy contract to seek an authoritative decision from the court as to how the policy operates.

“The court has now made its decision.”


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. If it took a court case to clarify the wording, how the hell was Pearl’s average customer going to know what it meant?

    Fin Prom rules, TCF, duty of care…..

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm