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Ilford IG3 8SG

Email: andy.walker@talk21.com
Tel: 07956 263088

Why I say the FSA have been letting with-profit policyholders down

In the same way the FSA allowed unsustainable lending practices to damage bank balance sheets, I say the FSA, and so far, the courts, are allowing unsustainable commissions to damage insurers' balance sheets.

On 19th November 2009, the court of appeal refused permission in my case against CIS over them paying commissions at 13.6% on a stakeholder fund charging 1% pa which I argued damaged with profit returns and also claiming the CIS were wrong to pay no annual bonuses on guaranteed annual rate personal pensions. I will attach the judgment in due course. I am baffled by the Court of Appeals decision to refuse permission. The CIS currently pay around the premiums paid in at maturity on a 10 year endowment. Such a poor return strengthens my view that there is a link between the unsustainable commissions and poor returns to with profit policyholders. Meanwhile the November 2009 issue of Money Management reports the FSA will be investigating with-profit providers to see if they have been treating policyholders fairly. It will be interesting to see whether the FSA will continue to allow loss making commissions to stay in place.

This leaves a similar cases against Standard Life and one against CIS alleging they are paying unlawfully high commissions of up to 27% on a fund charging 1%, plus CIS are wrong to allow GARs to impact upon endowments. The CIS deny any unlawful acts. I will be arguing the facts and the law are different in these two cases in an effort to prevent them being struck out. A European directive which did not feature in the first case will be relied upon.

On another point, I cannot understand why the CIS are refusing to grant loans to their endowment policyholders as the attached letter. The reason they have given, to comply with recent "changes in legislation" cannot be right so I have asked them to provide the detail of the legislation which the CIS have so far refused to provide. I will report further on this point in future along with how other cases are progressing in the New Year. If you wish to support me, my facebook page is www.facebook.com/andywalker19. It might be possible for other policyholders to lodge an adjourned claim, please contact me if you want to consider this.

Yours sincerely

Andy Walker