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Monday 28th September 2015
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updated 5.50pm, Wednesday 29th April 2020
A Pandora's box ruling
The recent ruling that there might be mis-selling of PPI products by banks because they didn't disclose that they received commission on it opens up a Pandora's box.
I have long believed that if endowment mortgages were mis-sold, and some of the later ones certainly were, the culprit was not the insurance company where the lender was also the intermediary/adviser. The relevant bank or building society must be held to account. Rather than incur additional legal costs, perhaps the life companies should do a deal with them, unless the lenders want to slug it out in the courts.
While on that subject, could life companies, on behalf of their with-profits policyholders, sue public-sector pensions schemes? Mineworkers are a prime example because, for example, they quoted a transfer value of X when someone was leaving a scheme and 3X when they were reinstated following a mis-selling award. The basis was actuarially consistent, but they valued leavers' benefits on opting out and stayers when coming back in. Everyone was so concerned to 'sort it out' that no one cared about culpability and accountability. I'm 10 years retired and some distance from the figures, but we're talking billions.
Finally, Paul Klumpes says that the chancellor of the Exchequer talked of inter-temporal equity and wondered whether that was a field for actuaries (The Actuary, September 2015, bit.ly/1FRoXAk). I'd missed the chancellor's comment, but I previously suggested just such a thing (The Actuary, November 2014, bit.ly/15DKZLK).
A longer paper was touted, but there was not much traction.
I have long believed that if endowment mortgages were mis-sold, and some of the later ones certainly were, the culprit was not the insurance company where the lender was also the intermediary/adviser. The relevant bank or building society must be held to account. Rather than incur additional legal costs, perhaps the life companies should do a deal with them, unless the lenders want to slug it out in the courts.
While on that subject, could life companies, on behalf of their with-profits policyholders, sue public-sector pensions schemes? Mineworkers are a prime example because, for example, they quoted a transfer value of X when someone was leaving a scheme and 3X when they were reinstated following a mis-selling award. The basis was actuarially consistent, but they valued leavers' benefits on opting out and stayers when coming back in. Everyone was so concerned to 'sort it out' that no one cared about culpability and accountability. I'm 10 years retired and some distance from the figures, but we're talking billions.
Finally, Paul Klumpes says that the chancellor of the Exchequer talked of inter-temporal equity and wondered whether that was a field for actuaries (The Actuary, September 2015, bit.ly/1FRoXAk). I'd missed the chancellor's comment, but I previously suggested just such a thing (The Actuary, November 2014, bit.ly/15DKZLK).
A longer paper was touted, but there was not much traction.
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