Aviva policyholders set for £500 million payout
In February last year Aviva, the UK insurance giant, offered to pay out £1 billion to policyholders who agreed to give up their future rights to a share of the company's orphan fund. The fund in question was valued at £4.2 billion in February 2008 although it has since fallen to a value of £1.2 billion. Due to a legal challenge by a number of policyholders, the original scheme was put on hold and the payout figure has now been downgraded down to £500 million.
However, a court case earlier this week cleared the way for Aviva to agree a £500 million payout with policyholders, even though a small number are still refusing to accept the deal. The company expects to pay out between £200 and £1150 to eligible policyholders, out of the share of surplus funds commonly referred to as "orphan funds". However, there is controversy in that Aviva has been cleared to retain £700 million for the company and shareholders, giving policyholders less than 50% of the funds on offer.
As the agreement has been ratified in the courts there is no going back now and, despite talk of further legal challenges, the situation seems to be clearer than ever before. It is now highly likely that other insurance companies in the UK will look to distribute their orphan funds along similar lines, allowing them to retain the majority of the funds in question.
Share this..
Related stories
Could UK unemployment hit 4 million?
A report by the Centre for Economics and Business Research (CEBR) has revealed what could become a doomsday scenario for the UK economy. The survey suggests that a combination of the depth of the worldwide recession, the UK recession and the government's handling of the situation could lead to UK unemployment topping 3.8 million!
While there is no doubt that the report is considerin...
Car insurance fees hit £333m
Britons are paying out huge sums in fees to car insurance providers every year to make amendments to their policies, it has been revealed. The fees are charged by providers when drivers fail to notify them of changes which could invalidate their policies. These include a change of address or name or improvements to vehicles. Price comparison site uSwitch.com calculates that some £333 million was...
Read MoreLondon Stock Exchange reveals Turquoise investment
As expected, the London Stock Exchange has today confirmed it has taken a majority stake in alternative trading platform Turquoise, a venture which many people had believed would initially cause concerns for the London Stock Exchange. However, after £40 million start-up costs and £15 million of losses the banks behind the venture have effectively given up and handed control to the London Stock E...
Read MoreWhere did all the money go?
As the UK economy continues to bump along in recession many people are now wondering where the billions upon billions of pounds of taxpayer's money has all gone. We have seen a quantitative easing investment programme in the billions, we have seen VAT reduced, we have seen the UK government take a large stakes in UK banks and investment programmes continue up and down the country. However, if the...
Read MoreHouse prices hit two and a half year low
House prices across the UK have hit a two and a half year low with average year on year price falls of 7.3% but the bad news for home owners is that the situation is likely to get worse before it gets better. Recent figures also show that the supply of new homes in the UK has almost dried up which was expected but is a worrying sign for the UK's house building sector which faces another testing p...
Read More