Aviva Norwich Union Reattribution _ Inherited Estate

Aviva Norwich Union Reattribution - Inherited Estate

Aviva (formerly Norwich Union) has confirmed its revised reattribution for the excess ‘with profits’ funds known as the Inherited Estate in the old CGNU Life and Commercial Union 'with profits' funds.

Aviva restructured its reattribution offer following the original offer being withdrawn on 4 February this year.  The revised reattribution will mean that 90 per cent of eligible with-profit policyholders will receive between £200 and £1,150 each from the £1.4bn inherited estate.  The remaining 10 per cent of policyholders are expected to receive higher payments.

This is a reduction for policyholders in bonus terms of around 50% and a fall in the fund surplus of 33% from the originally valued £2.1bn inherited estate as at 30 June 2008.

The original withdrawal in February and revised offer is based upon the significant decline in equity and property values over the last year.

High Court Approval

This calculation will be presented for approval at the High Court in September 2009.  

We suggest this has taken way too long to resolve and even now, by the time the revised reattribution valuation is presented to the High Court, markets may have recovered marginally as they have done over the last few weeks by over 20% and by the time the reattribution is distributed, markets may have recovered to previous levels meaning policyholders may received less then the valuation at the current time.  

Why it cannot be distributed as a percentage of market value at the exact time of distribution we do not know.

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