BONDHOLDERS AND A SCHEME OF ARANGEMENT (SoA) - Our Understanding

  • Diver
  • 11/10/08 31/05/09
  • a depositor
  • Offline
Posted: Sun, 25/01/2009 - 20:48

The situation regarding bondholders has always been less under our control than the case for direct depositors since as individuals they are unknown to KSFIOM who see each life company as a single corporate depositor. During the early days back in October we were made aware of the position relating to this group, it was decided to have representation of bondholders on the informal committee (against the initial wishes of the IOMG). However you need to be aware of the following:

 Under the DCS and thus under the proposed SoA, bondholders receive no individual cover or guarantees. Each life company is eligible to claim up to £20,000 per company which given the number of bondholders this covers, in most cases equates to under £1,000 per individual bondholder, the precise number depending on the bond company your wrapper product is using e.g. Aegon Scottish Equitable, AXA, Royal Skandia etc.

 In terms of voting for or against the SoA or liquidation, bondholders as individuals have NO RIGHTS OR VOTES – these rights are vested in the life companies themselves who are being represented to date as a homogeneous group.

We have been continually requesting meetings involving representatives of the bond companies who are meeting with the IOM Government to discuss the SoA. As a group we are fully conversed in the complexities of their position and have been pressing the IOMG for clarity for worked examples relating specifically to bondholders.

We have been told that the life companies are ‘content’ with the latest version of the SoA. We are not and that is why we are pressing for more information to be contained in the final affidavits to be lodged tomorrow, some of which we believe should relate specifically to the position of bondholders.

You will have noted that we have also been running a PR campaign in the specialist financial press such as Money Marketing who have been receptive to the key issues we have been trying to get across, to get the financial advisers to pressurise the life companies and for the life companies to use their weight of total deposits to make a difference to the outcome.

If bondholders want to make themselves heard, they should be communicating with the financial advisers who sold them these products making sure they are pressurising the life companies to get a 100% solution for depositors and forcing the life companies to show their hand regarding how they are going to satisfy the depositors of over 20% of KSFIOM total assets. They have a weight of argument in this conversation and to date they have not been using it on depositors’ behalf.

Please note that we have once again requested that the IoM authorities invite representatives of the life companies to participate in any and all discussions surrounding the DCS and any SoA - we await their response.

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Bondholders of IOM Insurance Companies

  • stornaway
  • 28/10/08 n/a (free)
  • a depositor
  • Offline
  • Mon, 26/01/2009 - 20:17

1.In a Q & A statement of 27 November last on the IOMG website appears the following very important Answer in connection with any SoA:
" Life Companies will be treated equally with other depositors in any distribution. This means that the distribution of available liquidated assets to individual accounts held by life companies (including policyholder linked accounts) will be determined pro rata by the value that such accounts represent in proportion to the total value of deposits. A SoA may provide more timely and/or increased distributions to depositors, including life companies."

2.According to information furnished by the Liquidator Provisionally in his last Affidavit, Life companies hold nearly 33% of the total value of deposits with KSFIOM.

  1. We should all be able to see from this the wisdom of Diver's insistence in his posted letter for Alix & Partners that we must see very specifically an example of exactly how the application of an SoA would work in the detail for our Bondholders.

  2. Thanks again Diver for being on the ball on this aspect.


Insurance Company / Bondholders

  • chb
  • 10/10/08 15/10/09
  • a depositor
  • Offline
  • Mon, 26/01/2009 - 19:32

Correpondance today with the Insurance Company holding our Bond, confirms that they are persuaded that SoA represents a better option for Bondholders (and presumably for themselves) than does the DCS. But -

They are not prepared to explain in any detail why this is the case or share with us the basis of their assessment.
They are not prepared to say whether they will be consulting with Bondholders regarding this preference prior to any voting.
They are not prepared to say what payout or timeline is expected under either scheme.
They refuse to accept any liability for the loss of any funds deposited in KSF IoM.

I have asked why they have yet to identify any acceptable alternatives to these two (unacceptable) options. I have asked if they would be making the same decision if THEY were responsible for the shortfall, instead of the Bondholders.
I have asked if they will be accepting responsibility for all or even some of any shortfall.

No answers but I will keep asking. I sincerely hope that in supporting an SoA the Insurance Companies will not be removing our right to challenge their liability.


Scheme of Arrangement

  • Mrs Not Too Happy
  • 12/10/08 31/05/09
  • a depositor
  • Offline
  • Mon, 26/01/2009 - 08:29

I've been waiting and wondering since the start of October. Here we are at the end of January and we're now talking about a scheme of arrangement. That's a joke and if that's all Alix & partners can come up with then what a waste of time & money !

It's little better than liquidation and, in any case, I assume that we've given up on our demand for 100% return. I for one feel badly let down by everyone (Iceland, UK, Isle of Man).

I'm a bondholder and it looks as if I'm back to the solicitor's office to continue my professional negligence claim against my IFA. What I was really looking for was my money back so as I can stop worrying about my future, stop the worry and stress of my potential legal case. I just want to get on with my life.

I fear now that this debacle it going to suck me in and I look forward to further years of worry and uncertainty.

I think I'm more angry now than I have been at any point since the bank went down !


sue your ifa

  • barbarajee
  • 11/10/08 31/05/09
  • a depositor
  • Offline
  • Tue, 27/01/2009 - 11:12

what on earth have you been waiting for. if you have a complaint against your ifa, sue him. contact the ifa action site for more information or contact the ifa group leader. there are a few of us already going down this road and we expect results.


We have our answer

  • calpespain
  • 12/10/08 n/a (free)
  • a depositor
  • Offline
  • Mon, 26/01/2009 - 08:13

Our Life companies don't give a *hit about us, that has been clear from the start, mine is Skandia and they are and always have been use & less. As all they are concerned with is they get their commissions, they really are a bag of scum. Everyone who is a bondholer, now write to your insurance companies and ask them what are they doing to protect you. Naturally you are gong to get back, if they bother to respond, a load of old crap. But, hey, it could be the one letter we all need to screw them.

Lets get writing and drawing attention to our plight, come on, what are you waiting for.

Even the IOMG doesn't want us around nor wake up the Insurance companies to our situation. Let's give it a go and make our voices heard.

Diver has said as it is, so now it's our turn to help ourslelves as most we can, lest sink the *astards. That way we get back 90%.


May I suggest you contact the

  • expatfrance1
  • 15/10/08 31/05/09
  • a depositor
  • Offline
  • Mon, 26/01/2009 - 10:14

May I suggest you contact the press with regard the Insurance companies, especially when it looks like they are still prepaid to demand commision for funds they have lost.

I am sure the press would love another 'mis-selling' story.


We have our answer

  • grapow
  • 20/10/08 31/05/09
  • unspecified
  • Offline
  • Mon, 26/01/2009 - 09:28

We too are bondholders with Norwich Union International. I absolutely agree that the comments from calpespain (ironically our bond was to be used to buy property near Denia, just a few miles up the coast from Calpe, Spain!). NU assure me that they "are working hard" with the Manx authorities but never articulate what this actually means!
In my view the fact that the major life offices included KSFIOM on available funds makes them culpable in this matter. I have now reached the stage where even the Aviva Group CEO, Andrew Moss will not reply to my mailings nor will his PA even take my telephpone calls. Not that I have been rude (YET!) just persistent in asking them questions they plainly dont wish to answer. What a complete farce!