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Which? condemns using orphan money to pay misselling fines

Which? has attacked providers using their inherited estates to pay misselling costs, claiming it is like “allowing people to commit a crime and avoid a fine”.

At a Treasury select committee hearing this week, chief executive Peter Vicary-Smith said it is wrong to allow providers to use their inherited estates to fund misselling costs, shareholder tax, staff pensions or new business.

Principal policy adviser Dominic Lindley claimed Norwich Union used £180m of its estate to pay misselling costs and £83m to top up its staff pension scheme. He said NU used hundreds of millions of pounds to pay shareholder tax, to the detriment of its policyholders.

Lindley said Axa had used £400m of its inherited estate to pay shareholder tax.

The FSA is consulting on whether misselling costs can be paid using inherited estates.

FSA chief executive Hector Sants said: “I reject completely any suggestion that we have not been completely crystal clear that our job is to get a fair deal for policyholders.”

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