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Who is going to take care of not so little orphan assets?

Whether you believe insurance company orphan assets stand at £20bn or £40bn,it is easy to see why everyone wantsa share of the spoils.

On the higher estimates, orphan assets top the amount Chancellor Gordon Brown is promising to spend to revitalise the health service, transport infrastructureand to shore up the UK&#39s defences.

A group of left-wing MPs have called for a windfall tax. This would simply be punishing thrifty investors and surely goes against the grain of what the Government says it wants to achieve.

The Consumers&#39 Association, having scrutinised Axa&#39s offer, wants a 90/10 policyholder/company split to apply – and many IFAs agree.

Axa wants to offer each policyholder a payment of around £400 which clearly does not add up to such a split. The rest would be retained for long-term investment, which many argue would benefit shareholders but not necessarily policyholders.

It is difficult to blame any insurer for wanting to retain a fighting fund, given the Government&#39s reckless enforcement of the 1 per cent margin on stakeholder. But having decided to set what could become the industry standard, Axa must come up with sound arguments to justify its offer.

IFAs should not accept on face value a deal thrashed out between an insurer and the regulator. As one of the few groups which understands the issue, IFAs are in a unique position to decide if Axa&#39s offer is fair to their clients – the policyholders.

If they decide it is not, they and life offices should steel themselves forsome tough negotiations.


Opra says fines system is working

The Occupational Pensions Regulatory Authority says its policy of imposing small fines up to £50 is keeping employers up to date with pension contributions.Opra says it is actively using its authority to issue civil penalties for late payment of employee contributions and late production of audited accounts.It claims its ability to issue penalties rather than […]

Home a loan in a halfway house

The Treasury is not renowned for its finger on the pulse assessment of the personal finance markets but the revelation last week that it does not know what a mortgage is has to be one of the corkers of this administration.Joking aside, it is a bit worrying that a Government decides it will regulate a […]

Some IFAs just take the biscuit

With their very livelihoods under threat thanks to ever tightening margins under stakeholder pensions, you might have thought IFAs had serious matters to worry about.But not it seems, if IFA feedback from Scottish Equitable&#39s recent stakeholder pensions roadshows are anything to go by.“The seating was very cramped (and I&#39m not a fat *******)” said one.“More […]

LIA says stakeholder needs &#39the hard sell&#39

The Life Insurance Association believes stakeholder can be a money-spinner for IFAs despite the 1 per cent charging cap.It says IFAs can rake in money if they harness the group pension market and adopt hard-sell tactics.President Peter Sprung says discussions with providers have indicated that commission within the 1 per cent charge can be as […]


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