HC Deb 12 November 1998 vol 319 cc303-4W
Mr. Stunell

To ask the Chancellor of the Exchequer what discussions(a) he and (b) his officials have held with the Prudential Insurance Company relating to the redistribution of surpluses on life funds; and if he will make a statement. [59454]

Ms Hewitt

The Prudential announced in 1996 that it was opening discussions with the DTI on the attribution of the inherited estate in its long term business fund. These discussions are continuing with the Treasury, which took over responsibility for insurance regulation from the DTI in January 1998. The total amount involved was estimated by an official of the Prudential, when the company gave evidence to the Treasury Select Committee on 2 July 1998, to be between £6 billion and £8 billion.

It is the Treasury's policy not to comment publicly on discussions which it may have with companies in its regulatory capacity, in the interests of effective regulation and commercial confidentiality. The previous Government's position on inherited estates was set out in a statement by the then Under-Secretary of State for Corporate Affairs in February 1995, and reaffirmed by my right hon. Friend the Member for Airdrie and Shotts (Mrs. Liddell), the then Economic Secretary, in a reply to my hon. Friend, the Member for Halton (Mr. Twigg), on 24 July 1998, Official Report, columns 750-52. The Treasury will deal with the Prudential's proposals, and any other proposals for attribution of the inherited estates of life offices, in accordance with the principles set out in those statements. The Treasury will place particular emphasis on protecting the interests of policyholders.