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R&SA to review £1bn in orphan assets

Royal & Sun Alliance is the latest life office to set up a review into distributing its orphan assets.

R&SA says it has about £1bn in orphan assets and has around 450,000 with-profits policyholders who could be eligible for handouts.

But the company claims it is likely to be a “long and complicated process”.

It says the surplus has been built up by achieving returns in excess of the “current reasonable expectations” of policyholders.

R&SA says it is “reviewing the current rule of thumb which is a 90 per cent/10 per cent split of the orphan asset fund set in policyholders&#39 favour against shareholders”.

Following Axa&#39s proposals to pay an average of £400 each to with-profits policyholders, the Consumers&#39 Association called for insurers to be more open over what they stand to gain from unlocking orphan assets.

R&SA group chief executive Bob Mendelsohn says: “In the UK, we have an orphan estate of about £1bn before taking account of any provisions and before any attribution between policyholders and shareholders.

“We have started a full review to establish what is the most approp-riate use of this estate, taking into account the interests of all parties but, in common with other companies, this will be a long process.”

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