AXA received court approval for its plan to distribute the bulk of nearly £1.7 billion ($2.5 billion) in “Orphan Assets” from surplus profits and unclaimed life benefits to shareholders rather than policy holders.
According to a BBC report Mr. Justice Evans-Lombe reached a “clear conclusion” that there was no basis to interfere with AXA’s proposal, which was based on the advice of independent actuaries, approved by Britain’s Financial Services Authority and accepted by 78 percent of AXA’s policyholders.
The 660,000 Sun Life and Provincial and Equity & Law policy holders will receive payment of 31 percent of the outstanding funds, approximately £527 million ($ 780 million) an average of £400 ($ 592) per policy. The remaining funds will be apportioned among AXA Group companies.
The Consumers’ Association, which had sought to block the deal, has not indicated whether it will appeal the decision, but has asked the Chancellor of the Exchequer, Gordon Brown, to open an investigation into the lack of transparency in the accumulation of surplus assets.
The case has further implications, as the U.K.’s Prudential has approximately £7 billion ($ 10.36 billion) in “orphan assets,” which it intends to distribute, and it’s estimated that other British life companies hold another £13 billion ($19.24 billion).
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