Norwich Union has taken the decision to cut its average market value adjustment penalties by 25% for policies taken out between 1998 and 2002. This means that the average penalty will reduce from 8% to 6% in respect of with profits policies. The reason for the cuts is apparently due to more stability in the investment markets.
Our View
Obviously, we welcome this news from Norwich Union. Returns have been getting better and this company is letting their policyholders benefit. A senior actuary at Norwich Union said that the reductions meant that only people that invested between 1998 and 2002 now suffer any form of market value adjustment penalty. All other policyholders could surrender their policies without these reductions.