HC Deb 31 January 2000 vol 343 cc445-7W
Mr. Cohen

To ask the Chancellor of the Exchequer what recent representations he has received about the mis-selling of endowment policies; what remedies are available to holders of endowment policies which do not realise sufficient capital on maturity to meet the mortgage repayment commitment; and if he will make a statement. [107128]

Miss Melanie Johnson

The information requested falls within the responsibility of the Director of the Office for National Statistics. I have asked him to reply.

Letter from Tim Holt to Mr. Paul Flynn, dated 31 January 2000 As Director of the Office for National Statistics (ONS), I have been asked to reply to your recent parliamentary question asking what was the total number of death certificates issued in Wales in each of the past 10 years that mentioned (a) heroin, (b) methadone, (c) ecstasy, (d) paracetamol and (e) alcohol. Information is available for usual residents of Wales, rather than for deaths occurring in Wales. The information requested in parts (a) to (d) of the question can only be supplied from 1993 onwards when text from the death certificate was first stored electronically. This enables named drugs to be identified. The ONS has constructed a database of deaths where the underlying cause of death was drug-related. Table [1] shows the numbers of deaths on this database where the substances named in (a) to (d) were mentioned on the death certificate. Some deaths may be counted more than once, for example if heroin and methadone are both recorded on the death certificate. It is not possible to identify all deaths with a mention of alcohol from the ONS drug-related database. The ONS does, however, have a standard list of underlying causes of death regarded as being attributable to alcohol and alcohol-related illness. Figures for these deaths are presented in Table [2].

Miss Melanie Johnson

The advice and selling of endowment policies is fully regulated by the Financial Services Authority (FSA). On 21 December, FSA announced the conclusions of recent work on endowments. FSA concluded that on average holders of mortgage endowments have enjoyed returns which mean they have fared at least as well as they would have done with a repayment mortgage, and that there were no grounds for an industry-wide review of all past business. However, targeted visits to product provider and independent financial adviser firms show current selling practices to be poor. As part of its normal regulatory activities, the FSA will make follow-up visits to check for marked improvements in sales practices by the end of 2000. The FSA will not hesitate to take disciplinary action where appropriate if standards remain poor.

For investment business, including the sale of endowment policies, a redress mechanism has been established under the Financial Services Act 1986. Advisers and sellers of financial products, including endowment policies, are obliged to follow rules established under the Act which are designed to protect the financial interests of investors. The rules focus on giving best advice and assessing the suitability of proposed products to the investor's circumstances. An endowment policy holder with a loss resulting from non-compliance with these rules can complain to the firm involved. If the firm cannot settle the complaint, the Personal Investment Authority Ombudsman has the power to require firms to pay compensation in appropriate cases.

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