Scottish Life has begun to repay 17,000 with-profits policyholders after admitting it has underpaid them between January 2010 and March 2011.
Scottish Life is to pay back an average of £350, with some policyholders set to receive more than £900. According to the Daily Mail, the payments have already begun and the insurer says it intends to pay back all policyholders by the end of this year.
The repayments follows a detailed review of the financial state of Scottish Life with-profits fund, which has been closed for the past decade. The review highlighted a bigger surplus when working out the value of the maturing policies. The surplus determines the size of the bonus.
The FSA has been made aware of the repayment and none of Royal London’s other with-profits funds are affected, according to the Daily Mail. Scottish Life has 105,000 with-profits customers and its fund is valued at £3.2bn.