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Pru strikes compensation deal with big firms over CI

The Prudential has been forced into an embarrassing compromise over its controversial decision to increase criticalillness rates and drop guarantees by offering compensation of up to £75 per case rebroked elsewhere.

The compensation deal, offered exclusively to major players, including Misys, Tenet and Bankhall, has so far not been extended to smaller IFAs.

This has left smaller IFAs livid, saying it is shameful that one set of terms exists for big players and another set for smaller firms.

Pru says its first priority is to sort out its key business relationships and that it will consider deals for smaller IFAs.

The deal extends to 60 days the 30-day free CI cover offered by the Pru to everyone hit by its decision made two weeks ago which affects new and pipeline CI business.

The deal assures that, going forward, cases remaining with the Pru will be resolved under its new rates in a “reasonable” timeframe and most importantly compensation will be offered to cover any administrative costs incurred.

Misys says it is being offered £75 per case which would total £570,000 if all members were to take it up. It is believed the compensation negotiated with the other players is similar to this £75 per case figure.

Misys member Life Policies Direct director Jason King says: “I have yet to make a decision whether or not we should take this offer. It is possible the Pru is rushing into this with the same lack of sense illustrated by the original decision.”

Michael Philips proprietor Michael Both says: “The Pru has behaved in the most abys-mally unethical way but only the networks get compensated because they are bigger than everyone else. It is shameful.”

Prudential spokesman Darragh Leeson says: “From the beginning, we realised it was important to sit down and have a discussion with our key business partners. Going forward, we will consider what we can do for other intermediaries.”


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