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Email: andy.walker@talk21.com
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One law for the rich another one for everyone else in the Irwin judgment?

Low cost pensions were introduced in 1991 to give policyholders a better deal by stopping high commissions eroding the value of the fund. I have documents showing that the FSA oversaw the process whereby the CIS and Standard got round this by paying commissions from the main fund where my endowments are invested. The FSA has done an about face and says the practice breaches regulations. I say loss leading commissions are unfair and unlawful, but rather than go into the merits of my argument, High Court Judge Irwin's Standard judgment states at paragraph 15.

"If there was a large sum of money at stake, then litigation involving a lot of cost may be proportionate. That significant sum of money might derive from the loss of one heavy investor or one person with a great deal of loss at stake derived from the level of commission, or it might arise from a large group of people with relatively modest losses at stake. That is immaterial. It is not the case that this is one law for the rich.
and another for the poor."

And so Judge Irwin strikes out my Standard case saying it is too small to be heard but a rich man's claim would be heard. This appears wrong to me. It appears to breach the right to a fair trial and I expect to make an application to the European Court of Human Rights shortly. Judge Cowell makes a similar point when striking out my claim at his paragraph 30.

The Lightman, Toulson and Arnold Judgments

This had two parts, that the CIS was wrong to pay commissions in excess of the 1% statutory cap because it breached stakeholder law or had an unfair adverse effect on my with profit polices and secondly that the CIS were wrong to stop paying annual bonuses on my personal pensions.

Court of Appeal judge Toulson at paragraphs 6 through to 9 of his 2009 judgment attached finds that Judge Lightman misunderstands the commission part of my claim. Judge Lightman finding wrongly that I was complaining about commissions coming from the stakeholder fund. When my complaint is about commissions coming from the main fund where my endowments are invested. However, at paragraph 19 judge Toulson states there was no evidence to support my allegation that paying a subsidy had no impact upon my policies. However, Toulson did not have the benefit of the June 2010 FSA report before him, so perhaps he might have viewed things differently if he had. I made an application to see the profit and loss accounts for stakeholder pensions but the Arnold judgment attached shows the CIS do not keep a profit and loss account for stakeholder pensions at his paragraph 19. During the action over individual pensions the CIS repeat the point that they do not keep accounts for sub-funds. This begs the question of how can they make a fair allocation of fund returns?

If a company has ten shops it needs to keep a profit and loss account for each shop to pinpoint where any losses are taking place. It seems odd that major insurers are running large funds without keeping profit and loss accounts for their sub-funds. The second part of my claim arguing that if it was wrong for Equitable Life to manipulate a terminal bonus downwards because of Guaranteed Annuity Rates, it must follow that it was wrong for CIS to do the same with annual bonuses was dismissed.

Breaches of EU Directive

I say the CIS and Standard Life not keeping accounts for pension sub-funds is a breach of EU directive 2002/83/EC. The directive states at article 21:

"Premiums for new business shall be sufficient, on reasonable actuarial assumptions, to enable assurance undertakings to meet all their commitments and, in particular, to establish adequate technical provisions.
For this purpose, all aspects of the financial situation of an assurance undertaking may be taken into account, without the input from resources other than premiums and income earned thereon being systematic and permanent in such a way that it may jeopardise the undertaking's solvency in the long term."

How can UK insurers comply with these restrictions on new business if they do not keep profit and loss accounts for the pension sub-funds that make up the main with-profit fund?

The second breach appears to be of article 19:

"...the respective interests of life policy holders and non-life policy holders are not prejudiced and, in particular, that profits from life assurance benefit life policy holders as if the assurance undertaking only carried on the activity of life assurance... Accounts shall be drawn up in such a manner as to show the sources of the results for each of the two activities, life assurance and non-life insurance."

This is because the CIS state in their own endowment literature that:

"The fund is exposed to a number of risks...
the cost of meeting guarantees that apply to most with-profits policies (such as basic sums assured and basic annuities together with any attaching annual bonuses); guaranteed annuity rates that apply to the majority of our with-profits pension business and guarantees that apply when certain with-profits bonds are cashed in."

How can the interests of endowment policyholders not be prejudiced by this?

The CIS and so far, the courts, say I do not have a right to know the exact amount of a maturity that matured last year, nor will they give me a bonus breakdown. The policy had a loan on it and I was given the net figure at maturity. This lack of disclosure on behalf of the CIS appears a breach of ANNEX III of Directive 2002/83/EC:

"In addition to the policy conditions, both general and special, the policy-holder must receive the following information throughout the term of the contract... Every year, information on the state of bonuses."

CIS Loan Mystery

The CIS have told the court that they do issue loans on policies, yet mysteriously the correspondence which is available on this site says they have stopped granting loans. Could it be that I am the only CIS policyholder offered a loan because I went to law on the point? And could the pressures caused by paying unsustainable commissions and guaranteed annuities be the real reason why loans have been withdrawn. It is known that changes in legislation which the CIS give as the original reason in their letter of 13.10.2009 for withdrawing loans has gone, to be replaced by a concern that policyholders have the "best product for their borrowing requirements" in a letter dated 29th September 2010.


It does not seem fair that judges, rather than juries, should make decisions which could impact upon the fate of elected representatives. In 2004 press reports, some of which are listed below indicate judges threatened to resign rather than pay additional taxes. It seems reasonable to believe from this that judges might favour political parties who promise to tax and spend less than Labour. After the judiciary making it clear they won't pay the taxes the rest of us are liable to I don't see how they can be neutral when it comes to judging Labour politicians. This is purely my view and not endorsed by any section of my party.