The Press and Journal (Inverness, Highlands, and Islands)
Equitable Life to close
Insurance: Windfall for policyholders after firm acquired by LCCG
Scandal-hit mutual life insurer Equitable Life is to shut down and distribute £1.8 billion to policyholders after being acquired by Life Company Consolidation Group (LCCG).
The average windfall is expected to be £6,900.
Britain’s oldest mutual life insurer is transferring all of its policies to Reliance Life, which is owned by LCCG.
It will free up £1.8 billion held as part of a regulatory capital cushion, which will be distributed to 261,000 policyholders.
The deal will effectively remove guarantees for some policyholders in exchange for a one-time payout, but will have to be passed in a vote set to take place in mid-2019.
LCCG expects the policy transfer to be completed by the end of next year, following regulatory and court approvals.
The closure of Equitable Life comes 18 years after its near collapse in 2000, when it lost a legal battle in the House of Lords over the rights of its policyholders, forcing it to close to new business.
More than a million of its policyholders in the UK and in excess of 15,000 in other EU countries, including 8,300 in Ireland and 4,000 in Germany, lost pensions, savings and investments due to alleged mismanagement.
Yesterday, Equitable Life chief executive Chris Wiscarson said: “When the Equitable closed to new business in 2000 it was inevitable that at some point the society had to come to an end. The benefit of bringing Equitable to an end sooner rather than later is that we can capture for withprofits policyholders the near record high values of the investments backing their policies.”
Danny Cox, a chartered financial planner at financial services firm Hargreaves Lansdown, called it a “wonderful windfall” for policyholders, with the closure drawing a “final line” under the insurance society.
Meanwhile, Standard Life Aberdeen (SLA) shareholders will meet on Monday to vote on the group’s plans to sell its European insurance business to Phoenix Group. SLA investors are in line for a £1.75bn windfall.