§ Mr. CousinsTo ask the President of the Board of Trade what is his policy on the distribution of orphan funds between insurance policyholders; and what sums have so far been identified and apportioned. [37022]
§ Mr. Nelson[holding answer 12 July 1996]: My policy remains as set out in the answer given by the then Under-Secretary of State for Corporate and Consumer Affairs on 24 February 1995, Official Report, columns 362–63.
The following companies have made announcements in the light of the policy:
Company Long-term business assets £ billion Amounts reserved solely for benefit of shareholders £ billion United Friendly Insurance 2.4 0.3 Legal and General Group 21.8 see below Pearl Assurance 12.1 1.0 The remaining amounts within the long-term funds are largely for the benefit of policyholders, save that shareholders are entitled to receive a defined share of any surplus in the funds declared in future. For the bulk of the funds, the defined share is 10 per cent.
In the case of Legal and General, policyholders have rights to receive at least 90 per cent. of any distributed surplus, except that directors have discretion over surplus arising from a sub-fund of some £200 million.