§ Mr. CousinsTo ask the Chancellor of the Exchequer if he will estimate(a) the number of endowment policies that are surrendered each year and (b) the lapse rate for new endowment policies; and if he will list those aspects of the surrender of endowment policies to which the Financial Services Act 1986 regulatory regime applies. [92463]
§ Ms Hewitt[holding answer 26 July 1999]: There are no published figures available for the number of endowment policies discontinued each year.
In October 1998, the Personal Investment Authority (PIA) estimated that, for regular premium endowment policies sold in 1996, the most recent figures available, the percentage of policies discontinued during the first year is as follows.
Percentage Sales channel Discontinued in year one Company representative 6.5 Independent financial adviser 4.5 Direct offer advertisement 4.5 Home service 13.0 Persistency generally improves during the lifetime of endowment policies. It is inaccurate to extrapolate these figures to subsequent years. Policies discontinued in early years are generally worthless on the traded endowment policy (TEP) market.
The surrender of endowment policies is not regulated under the Financial Services Act (1986).