Letter from Mr Mark Hodges, Chief Executive,
Norwich Union, to the Chairman of the Committee
Thank you for your letter dated 20 May 2008
requesting further information on the inherited estate.
I confirm that the evidence, both written and
oral, given to the Select Committee was correct. The funds are
open to new business and as we reported in our recent Life New
Business announcement the sale of with profits continues to be
an important source of revenue for Norwich Union, because these
excellent guaranteed products continue to meet increased customer
demand in these times of global financial turbulence.
The inherited estate continues to provide support
by meeting the capital strain imposed by new business. This support
is repaid to the estate over the life of the product.
For a limited period, the board decided to offer
an additional guarantee on our new product which was charged to
the Inherited Estate, rather than policyholders. This was in addition
to the support for the capital strain of new business. This additional
support was withdrawn from 1 January 08, but our policy of using
the Inherited Estate to fund the capital strain imposed by new
business continues.
The report that is referred to in your letter
is the annual report by Norwich Union that confirms the board's
compliance with our Principles and Practices of Financial Management.
Each year we send out an annual statement to every policyholder.
As well as setting out each policyholder's individual sum assured
and bonus the statement refers the reader to our website www.norwichunion.com/ppfm
where the report can be found.
If any customer does not have access to the
internet, we send out hard copies on request. For ease of reference
I enclose the report for CGNU and CULAC.[93]
23 May 2008
93 Not printed. Back
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