We’ve recently discovered that we’ve made an error in the unit pricing of our Distribution fund. This has also affected our Cautious Lifestyle pension fund, which invests in the Distribution fund.
The pricing error means the wrong number of units was allocated to some policies – some policyholders received more units than they should have while others received fewer.
We sincerely apologise for this error.
Who's been affected?
The error has affected relatively few people — less than 2% of our two million customers. Those include both life and pension policyholders invested in these funds, most of whom were affected by less than £100.
What are we doing about it?
We’re obviously doing everything we can to put this right as quickly as possible. We corrected the published fund prices on 13 July and started correcting the policies of all our current policyholders in line with guidance issued by the Association of British Insurers (ABI). This recommends that ‘compensation should normally be paid where the amount due is greater than £10’ or the price error is 0.5% and above. You can find more details about this in the Guide of good practice on unit linked funds, which is on the ABI website. We’ll have finished correcting these policies by the end of October 2007.
Where policyholders have switched out of the Distribution or Cautious Lifestyle funds we’ve credited units to their new fund(s). Where they’ve partially switched, we’ve credited units to the Distribution or Cautious Lifestyle funds, as well as their new funds, as the pricing error had a knock-on effect on these too.
We’re only increasing the unit holdings of policyholders. We’re not correcting the policies of those who benefited from this error. We’ll meet this cost ourselves.
Policyholders will see the correct number of units in their next yearly statement (or annual review if they have a Retirement Control pension). Bond investors will see the correct number of units in their next bond valuation. If their policy anniversary is between now and October, it may be in next year’s yearly statement, annual review or bond valuation. Customers who can view their policy details online will see the correct number of units from the end of October, if not sooner.
Where can I get more information?
If you think you have been affected by this error, and want to find out more, just get in touch with our customer helpdesk on 08456 1000 10 from Monday to Friday, 8.30am to 5.30pm.
