§ Mr. Wrigglesworth
asked the Secretary of State for Trade whether he will make a statement about the affairs of Capital Annuities Limited.
§ Mr. Clinton Davis
Capital Annuities Limited was authorised on 6th February 1969 to carry on ordinary long-term insurance business in the United Kingdom. The company has concentrated exclusively on the sale of annuities. On 3rd October 1975 the company undertook not to take on new business without the consent of the Department. The directors have now come to the conclusion that the company should cease trading and they presented a petition to the High Court on 30th April for a compulsory winding up order. The Official Receiver has been appointed provisional liquidator to take charge of the assets. Mr. P. F. M. Shewell of Coopers and Lybrand has been appointed special manager.
The company currently has about 3,500 policyholders. If a winding up order is made, the Policyholders Protection Act 1975 will ensure that Capital Annuities' United Kingdom policyholders will receive 90 per cent. of their claims or benefits, subject to a reduction for any over-generous benefits. Meanwhile, following the appointment of the provisional liquidator, the Policyholders Protection Board is urgently considering whether to exercise any of its discretionary powers to protect policyholders 358W available under Sections 15 and 16 of the Policyholders Protection Act. These include the power to provide for the making of interim payments to policyholders in respect of sums which fall due under United Kingom policies. I understand that the provisional liquidator will he arranging for a letter to be sent to policyholders as soon as practicable.