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The Actuary The magazine of the Institute & Faculty of Actuaries
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Windfalls or shortfalls?

An all-party Parliamentary group (APPG) examining the true cost of demutualisation among life companies and building societies has recommended that legislation be introduced requiring an independent check on ‘windfalls’ to ensure members’ interests are being protected.

The report, ‘Windfalls or shortfalls? The true cost of demutualisation’, is based on the group’s short inquiry, held in November. It comes shortly before Standard Life publishes the proposed payout to members in its proposed demutualisation this year. The report was launched on 7 March in Parliament.

The APPG report concluded that too many people in previous demutualisations have not been clear on the benefits, or otherwise, of the proposals from their institutions and have not had sufficient evidence to make an informed decision. Often the only material they will have received comes from boards who are campaigning for a ‘yes’ vote.

Commentary on the report focused mainly on the imminent demutualisation of Standard Life and on the role of the independent actuary in relation to this. More detail on the report can be found at www.accaglobal.com/pdfs/miscellaneous/appg_report_07mar06.pdf