Scottish Life members voted overwhelmingly to demutualise and transfer
business to Royal London at an extraordinary general meeting last week.
Qualifying members will get £500 cash for loss of membership rights
and qualifying with-profits policyholders will receive additional
enhancement to existing reversionary and terminal bonuses.
Around £960m will be distributed as enhanced benefits to qualifying
Windfalls have been an area of contention for policyholders as anyone who
assigned their policy is classified as having lost membership rights and
will not get the£500 windfall.
Policyholders affected could include those who may have assigned their
mortgage endowment policies to lenders in the late 1980s and early 1990s as
part of the terms and conditions of the mortgage.
Scottish Life will become the IFA division of Royal London and believes
the financial strength will make it a bigger player in the IFA market.
It is already providing a stakeholder product to Royal London and is
looking to boost its investment division which has been merged with Royal
London Asset Management. It has not ruled out a move in to the protection
Scottish Life chief executive Brian Duffin says: “Our financial strength
has improved, which will allow us to be more aggressive and to take a wider
“We have a strong reputation in the pension market with our technology and
pricing but we do want to build up our investment side. It would be nice to
be in the protection market at some time.”