Although the FSA has wriggled away from all calls for a formal review of low-cost endowment sales practices, it seems to be doing everything else in its power to ensure that the public are encouraged to complain about them. For example, we are now seeing:
Reprojections of possible maturity values based on assumed future growth rates which are significantly lower than those approved by the FSA's predecessors at the time that most policies were sold.
Reprojections based on the policy being surrendered but, from that point on, premiums continuing to maturity (which cannot happen in the real world).
Insurers apparently banned from explaining or offering any comment on the basis of these new and severely pessimistic projections, much less any-thing about track records or financial strength.
Certain life companies are not helping matters, most notably (for us) Norwich Union, for the simple reason that they seem to think it is okay to send these reprojections directly to our clients without sending a copy to us.
So far, we have had just one complaint about a low-cost endowment (needless to say, a Norwich Union one) which, thankfully, had been sufficiently well documented at the time of sale for the complaint to be justifiably rejected.
Norwich Union's reaction to our stern demand for copies of all future reprojections to be sent to us is somewhat puzzling. In short, they will not do so on a regular and automatic basis. We will have to ask them to do so on a case by case basis and such a request will be treated as a one-off. Next year, we will have to ask again. Thank you very much, NU.