France’s AXA Group defended its decision in a London court on Monday to payout only a portion of its subsidiary Sun Life & Provincial Holdings’ “orphan assets” to policy holders.
AXA’s plan, announced last June, to distribute approximately £1.7 billion ($2.47 billion) in surplus profits and unclaimed, or “orphan,” assets, offered policy holders £225 million ($327 million), the remainder would be included in the assets of the AXA group of companies.
The Consumers’ Association challenged the plan, even though a majority of policy holders had approved it, as unfair. It has also challenged a similar plan by the U.K.’s Prudential to distribute some £7 billion ($10.25 billion) in orphan assets.
AXA’s position remains that actuarial calculations show current holders are receiving fair value, and that turning over the bulk of the funds to the Group would assure adequate reserves for future policy holders as it would strengthen its financial position, rather than benefit only current policyholders.
AXA is required by law to seek judicial approval for the funds transfer, and the Consumers’ Association was granted permission to present its arguments against the plan. The trial will resume Thursday, when it will present its arguments in favor of increasing the amounts paid to individual policyholders, which now average approximately £400 ($580).
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