Ask your life company what they did to protect the money you entrusted to them

  • investor01
  • 13/10/08 n/a (free)
  • a depositor
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Posted: Fri, 17/07/2009 - 18:34

Recently I wrote to the Chief Exec of the parent company which owns the life company I used for the ill-fated deposit. The aim of that letter was to question the wisdom of continuing to use the IoM in light of the FSC's failings and to consider the reputational risk to their company. Not surprisingly I did not receive a personal reply from him but I did get one from the MD of the life company.

The response said that they (the life company) would consider the actions taken over KSFIOM when dealing with the regulatory bodies. Make of that what you will. The line that really was like the proverbial red rag to a bull was one that indicated the great news' that the recovery was guesstimated at 75%.

I resisted writing a vitriolic reply but instead made it clear that it was not great news that I was losing 25% of my savings and would have to wait anywhere between 5 and 15 years to see the rest of it. One specific point I made referred to a Telegraph article that somebody posted on this site - http://www.telegraph.co.uk/finance/personalfinance/offshorefinance/56746... - which referred to Royal London 360 who were aware of problems with Icelandic Banks in "early 2008" and who had asked those depositing through them into an Icelandic bank to sign a disclaimer.

In the MD's response he also talked about the "totally unexpected" collapse of KSFIOM. Perhaps it was, perhaps it wasn't. Now I know the discussion around when the industry knew about impending problems has been done to death - but think about it. I know for a fact that in the finance industry there is a great sharing of information unless it is specifically to do with competitive advantage. So ask yourself, if Royal London 360 knew of problems, how likely is it that your life company knew abosolutely nothing?

With the above in mind, I have asked the MD to come back to me to identify what steps he took to ensure that my money was safe when his competitor was asking for disclaimers. Akin to a posting by Mr Lynton, I also suggested that with this and my other points in mind, he might like to credit my bond with the lost money as the dent on the balance sheet would be minimal and as he said himself was likely to be eventually recovered.

How about tackling the top man/woman in your life company to see what they did to protect your money? For many of us it may be the IFAs who are culpable but I think that morally some of the blame rests with the big boys.

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How/why did life companies think their/our money was ring fenced

  • cypheath
  • 01/11/08 30/10/09
  • a depositor
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  • Thu, 13/08/2009 - 15:48

"The life companies thought bondholders’ money was ring fenced – and
told their bondholders as such. But since KSF collapsed the life
companies have not pushed for full recompense for depositors, nor
instigated a legal review of third party liability."

I have just been reading Press Releases on the Public Site & it's the first time I've heard that the ins cos. thought our money was ring fenced. Is there any proof of this statement or can anyone shed further light on this please.
Skandia have never told me this, have any other companies told any of you? Surely they are supposed to be the experts & should be aware of the repercussions if any of their actions cause such monumental losses.
Is this not a glaring admission of not using due dilligence, maladministration or whatever you want to call it, while playing fast and loose with "our" money which they say was "theirs" when they were winning. Now it's lost it seems to have mysteriously/notionally returned to us as "our lost money".

Has anyone had answers from them as to "How/what they did to protect their/our money"???


How/why did life companies think their/our money was ring fenced

  • grapow
  • 20/10/08 31/05/09
  • unspecified
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  • Fri, 14/08/2009 - 08:31

As a bond holder myself I have no knowledge of such a statement coming from any of the Insurers though agree that if this is factual it places a whole new level of significance to our claims?


Ring fencing

  • investor01
  • 13/10/08 n/a (free)
  • a depositor
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  • Fri, 14/08/2009 - 16:31

This is the first I've heard of life companies believing the money was ring-fenced. That said, they may have indeed thought that but on reflection would be unlikely to tell their customers.

I am still awaiting a reply from my life company to the question of what they did to protect my money when other life companies were asking people saving with icelandic banks to sign disclaimers. The last letter from them helpfully included a brochure on the IoM ombudsman should I feel that I have been inappropriately dealt with. I actually laughed - really I did. After all, the person who runs it is probably 'in bed', figuratively or otherwise with everybody in the IoM Government, IoM courts etc. Needless to say I dropped it in the bin.


Ring Fencing

  • cypheath
  • 01/11/08 30/10/09
  • a depositor
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  • Sat, 15/08/2009 - 08:17

Hi investor01,
yes I was surprised to read this in the most recent Press Release on the Public Site. My point is where did this info come from? can it be verified by whoever prepared this press release? If it is true and Ins Cos did believe it to be true (but never verified it) & told IFA's who then passed it to us, (my IFA said we had DCS cover which is why my partner & I put in £20K each, (at that time DCS was 75% up to a maximum of £20K) then surely it makes the Ins Cos more responsible for leading everyone down the garden path. They are just as responsible as Docherty & Co who were giving assurances about the bank's position & safety/protection of money right up to the bitter end.
Just thinking out loud as to how we can make "the big boys" more responsible for this catastrophe.


Ring Fencing

  • cypheath
  • 01/11/08 30/10/09
  • a depositor
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  • Sun, 16/08/2009 - 12:44

Can whoever prepared the last Press Release on the Public Site about Ins Cos please tell me where they got the information that the Ins Cos believed the money deposited in KSFIoM was "ring fenced"
Thanks


life companies

  • barbarajee
  • 11/10/08 31/05/09
  • a depositor
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  • Mon, 20/07/2009 - 15:35

i loved reading your letter but think blaming the life companies is a wasted excercise. when this happened last year, we went to see AXA and actually had an interview with them which was very civilised. whilst they were sympathetic, we were told that they have no inflence whatsoever on where money is placed, they are there to do as they are told by the IFA. They cannot and do not have any discussion regarding where funds are placed.

in any event, it is your IFA who you deal with directly and the IFA who deal with the life company. So it is up to you to sue the IFA and let the IFA sue the life company.


You are quite right

  • investor01
  • 13/10/08 n/a (free)
  • a depositor
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  • Mon, 20/07/2009 - 19:04

Barbarajee,

I completely agree with your comments and I am pursuing my IFA as my primary course of action. To be honest I have always been aware that the life companies probably have little or no legal culpability but that doesn't mean we shouldn't let them know that we believe they are morally involved, even if not legally. I still maintain that they would have known of impending problems and doing nothing does not demonstrate to the world at large that they are trustworthy organisations.

The only thing that hurts a company of the size of the life company is bad publicity - that they are scared of.

Rgds
Investor01


irish ombudsman

  • mr lynton
  • 27/10/08 31/05/09
  • a depositor
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  • Fri, 24/07/2009 - 06:16

Hi investor 01,
just to update you have been offered mediation by irish ombudsman between myself and Prudential to resolve our dispute - will be interesting if Pru take up this offer or not. If not goes straight to adjudication. Pru are governed by irish ombudsman who as i mentioned before seem to work much quicker than the english FO ( or have less workload),
regards, mr lynton


I'm impressed

  • investor01
  • 13/10/08 n/a (free)
  • a depositor
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  • Fri, 24/07/2009 - 14:56

Mr Lynton,

Thanks for the update and I'm impressed by the proactiveness of the Irish Ombudsman. I don't want to cast too many aspersions on the FOS but 6 months and nothing to show is not good in anyone's book. Still, as you suggest they may just be busy...

I hope Pru have the sense to at least talk and that things go well for you.


Irish Ombudsman

  • grapow
  • 20/10/08 31/05/09
  • unspecified
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  • Fri, 24/07/2009 - 07:58

I shall be fascinated to see the response Mr Lynton, our bond with NU (Aviva now) is administered thru Dublin. I have a definite view that NU are more culpable than the IFA on this occasion.


irish ombudsman

  • mr lynton
  • 27/10/08 31/05/09
  • a depositor
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  • Mon, 27/07/2009 - 16:39

Prudential have predictably refused mediation and so the coplaint is going to adjudication. These buggers do not understand the carrot , only the stick.


No surprise there...

  • investor01
  • 13/10/08 n/a (free)
  • a depositor
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  • Mon, 27/07/2009 - 18:13

It is reminiscent of the IoM and UK in that no one seems to want to even talk. It doesn't mean they have to agree to everything you or the Ombudsman says but to refuse to even try to sort things out by dialogue seems somewhat backward.

I recieved a reply from my life company and predictably they gave me a very polite brush off and deny any wrong-doing, placing the blame firmly with the IFA. Legally I know they are correct and always knew this but there are many oddities there anyway. For example, I downloaded the latest documentation for my policy and the section on compensation, which used to be a mere 8 lines long, now reads like a mini novella! I have gone back to ask why, if everything was tickety-boo, they felt the need to rewrite their documentation. None of the information that I can see has changed since October 2008 and had always applied - so why wasn't it in my documentation? I don't believe for one minute they intend to bend in any way but it is interesting trying to extract some facts from them


good idea

  • mr lynton
  • 27/10/08 31/05/09
  • a depositor
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  • Sat, 18/07/2009 - 07:12

I think this is a good idea to keep pressure on the life companies who could make a positive exit from this fiasco if they are seen to help out their clients.
I have taken the step of putting in a complaint to the Irish Financial Ombudsman to put pressure on Prudential and I must say they seem to move quicker than the english FO as I have had multiple letters back and it is moving towards adjudication already ( i have waited 7 months now for english FO) .
The life companies have made serious errors just like IFA'S and we should keep pressure on whoever we can.
I have written several times to the MD of Prudential and the only problem is the responses always come from an underling/ compliance dept.