Insurance Co's small print

  • Tricky Dicky
  • 24/10/08 30/05/09
  • a depositor
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Posted: Tue, 17/03/2009 - 11:36

Bondholders,
If you have not already done so, the legal team are looking for the 'small print' sections of the policies for all the various Companies. If you have already sent information, thank you, if not could you send it to me in either .pdf, or .doc formats, so that I can send it on to the relevant people for them to see prior to the IOMG issuing their revised SoA

Thanks
TD

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Bond holder, shaken but not stirred.

  • Kevin Platt
  • 20/10/08 31/05/09
  • unspecified
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  • Fri, 27/03/2009 - 16:48

Our bond company has just told us that we are to receive 10000 as joint bond holders.
Generally, although keeping us informed after a fashion, our company has made it very plain that they are the deposit holders (although we are the ones who stand to lose our money) and that they will make all of the decisions.
We are left without influence, our company will make the decision regarding the vote for or against the SOA and we will suffer the consequences.

I assume that most other bond holders are in a similar position.

As regards the small print, our policy states categorically that the company are covered by the IOM compensation (equivalent to the UK).
However as soon as the problem with Kaupthing began they were very fast to declare that all of the onus for Kaupthing selection was on our FA and by extension ourselves, the company were merely facilitators and blameless for including Kaupthing on their list of possible investments.
In fact, the company actually stated that they would go under if they had to provide the guarantees of compensation.


Confusion ..as always

  • chipmunk
  • 13/10/08 31/05/09
  • unspecified
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  • Fri, 27/03/2009 - 22:21

Pretty much in the same boat ...I have so say ref SoA etc....also I have always assumed that the Insurance firm are the Bond holder and the 10K will be split between all who have invested within that Bond...not so it seems as I am to be paid the full 10K..........whether I like it or not...I dont like it frankly, buy how come all bond holders within their master Bond are to receive t 10K each...confused ?


Chipmunk - Confusion as always

  • podather
  • 10/10/08 31/05/09
  • a depositor
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  • Sat, 28/03/2009 - 09:43

Under the terms of the EPS2 payment the insurance companies are able to claim up to £10,000 for each of the bondholders falling under them. It is then up to the insurance company how they wish to distribute those funds.
You have no say into whether they claim the £10,000 on your behalf or how they wish to distribute it.
I would say the fact that they are returning the full amount to you means you have done as good as you could have out of this.
Under the SOA there is no assured payment schedule for bondholders and only a guaranteed £20,000 payment to each insurance company (matching the DCS) but they were allowed to claim the £10,000 EPS payment for each bondholder before and if the SOA is voted into force.
Under the SOA the insurance companies will receive pari passu payments from the recoveries at the same level as all other direct account holders ie: 12% , 20% of deposit etc but again it will be up to the insurance company as to how, when and if they then pass these payments onto the individual bondholders.


SOA and Bond holders

  • bobwin
  • 23/12/08 n/a (free)
  • a depositor
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  • Sat, 28/03/2009 - 10:19

Your final paragraph Podfather.

In that case the 12.5% after 3 months(from successful vote for SOA) OR 20,000 less EPS2 payments means the Insurance companies get nothing as they already got 10,000 per bondholder from EPS2--I think it was 1,900 individuals or around 19 million up front.

Where is the benefit to them under SOA--which has now apparently been diluted---April 2011 before 50,000 is paid(20+15+15) and still leaving 26% by number waiting for their cash over 50K.

If this is better than DCS, then it(DCS) must be a pile of merde.

April 9th ___ Armageddon?

I cannot see why the insurance companies should vote for SOA when they get nothing for years---and they carry the weight in terms of value.

Am I confused?


SOA AND BONDHOLDERS

  • podather
  • 10/10/08 31/05/09
  • a depositor
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  • Sat, 28/03/2009 - 10:58

I have not had the priviledge, has had no one i believe of seeing the final draft of the SOA but my understanding is that at the fist assured payment date, all direct account holders would receive the greater of the two payments.
£20,000 (less anything paid under EPS) or 12.5% of there total deposit. So anybody with roughly in excess of £165,000 on deposit would receive more under the dividend as opposed to the assured payment.
The dividend would of course be less anything claimed under EPS.

This would also apply to the insurance companies, so they would also be eligible for 12.5% of the total deposit amount of all the bondholders combined invested under the one account in there name, less the amount they have claimed in advance under EPS on behalf of those bondholders.
I am unsure as to the deposit amounts of each of the insurance companies or the number of bondholders under each account but if the average deposit is in excess of £84,000 the insurance companies would also receive a payment at the first dividend stage. (£84K x 12.5% is £10,500 less £10,000 claimed under EPS = £500 additional payment)
There payment would be as a % of total deposits less the value already claimed under EPS and not calculated per bondholder.
The insurance companies are not eligible to claim the guaranteed £20,000 assured payment per bondholder
Then at the second assured payment or 7.5% dividend stage they would be eligible to claim the dividend with all EPS payments covered off at the first payment stage, again no eligiability for the £15,000 assured payment.
The benefit to anybody under the SOA as opposed to DCS is only that under the current proposed SOA the £175 maximum funding that the IOMG have committed to the SOA remains in there for distribution to all creditors until a point when all creditors have received a 60% return. (Aren't they generous) At this point the next £90 million of recoveries go exclusively back to IOMG.
Only once this £90 million has been returned would any further distribution to any class of creditor occur
Under DCS the funding is recovered ongoing from the recoveries so slowing down the distribution to creditors in the first few years.
The only advantages of the SOA over DCS for the insurance companies is this accelerated payment profile of dividends and not that it offers them assured payments up to £50k per bondholder, it only matched the £20,000 per account holder (ie: Insurance company) of guaranteed compensation under DCS.
The fact that IOMG made bondholders eligible for EPS payments via the insurance company assisted them in recovering up to £10,000 quicker than under the dividend payment method but only if the insurance company passes on the EPS money to these bondholders. There was no stipulation from IOMG that they had to do this, it was purely at the discretion of each Insurance Company to pass on these payments.


SOA and Bond holders

  • bobwin
  • 23/12/08 n/a (free)
  • a depositor
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  • Sat, 28/03/2009 - 11:16

But the 12.5 % and 7.5% payments are limited to a maximum of 20,000 and 15,000 per account holder and the insurance companies are account holders---as the insurance companies already get 10,000 per bondholder=19 million(under EPS2), then they will get nothing under the SOA which gives 50,000 per account holder by april 2011 or thereabouts.

They will surely not vote for this--my point! and they control 32% by value--so SOA is sunk.


SOA AND BONDHOLDERS

  • podather
  • 10/10/08 31/05/09
  • a depositor
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  • Sat, 28/03/2009 - 11:31

No they are not , the payments are the greater of either 12.5% and 7.5% or £20,000 and £15,000.
The assured payments are to guarantee £50,000 or below depositors 100% return within 2 years of the first payment.
Under your belief depositors with millions would only receive £50,000 back within the first two years.
The insurance companies and so by definition the bondholders have no guarantee of payments except the £20,000 per account holder, its the accelerated dividend payments without the backflow of funds until 60% payout that will get the insurance companies to vote for it over DCS.


Confused as always..

  • chipmunk
  • 13/10/08 31/05/09
  • unspecified
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  • Sat, 28/03/2009 - 16:25

Phew....thats hard work for me....so from a purey selfish view...ie my case..

Large invester...350K...within a Bond....and with your understanding as laid out, what do think I might get back and over what time frame

a) under Liquadation
b) Under SoA

Assuming nothing drastically changes in the near future...( Like me chaining myself to the palace....nobodys done that yet )


Chipmunk - Confusion as always

  • podather
  • 10/10/08 31/05/09
  • a depositor
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  • Sat, 28/03/2009 - 17:32

As a large investor with 350,000K at stake, within a bond, you should receive £10,000 soon from your insurance company
providing 1) The have claimed it, which I believe they all have and 2) They make the correct decision to pass the payment onto you.
Then on or around the 31st July, depending on if and when the SOA is finally implimented your insurance company would be paid 12.5% of there total deposit base. So on your behalf they should be claiming £43,750 less the £10,000 EPS payment.
This is paid out of assets already in the bank so will happen even if there was no funding.
The difficulty for bondholders I see is that the insurance companies will be claiming a % of the total value of deposits and then you are reliant on them distributing these funds equally amongst the bondholders at the rate of collection.
There is I believe nothing to prevent them from wholly paying out certain bondholders while refusing to pay other bondholders anything should they choose to do so.
Ethically you would imagine they will pay you out equally at the same rate they collect so you should at that point receive a further payment of £33,750.
Then a further year down the line you would get 7.5% or £26,250 to mean that about 16 months from now you should have received £70,000 of your deposit back.
There will then be a further payment at the year 2 point of another 7.5 or 10% but these % dividends can increase depending on the rate of recoveries but will not decrease due to the IOMG funding.
Once you receive £210,000 back you will then not receive another payout until IOMG recover £105 million of the funding it advanced the scheme.
Only then would any further payouts to creditors commence.
There is £993 million at book value of assets in the bank (cash, COD's, Loan Book and KSF UK) and £850 of liabilities.
IOMG will leave there money in the bank until recoveries reach roughly £335 million, at this point the payout to creditors would be 60% (£335 recovered, £175 funding = £510 total or 60% of liabilities) .
The next £105 of recoveries would go to IOMG to bring them level with other creditors, so £440 recovered.
Any recoveries over £440 million would then be paid out pari passu to all creditors inc IOMG.
With £993 of assets there is a chance that recoveries will be over £440 million (or 45% roughly) and anything recovered over this % you would receive additional funds.
IOMG would only receive all there funds back at 86% recovery and at anything over this you would receive all the interest you should have earned on your deposit over these many years.
Once creditors have received a FULL payout (deposit + interest) then IOMG will recover interest on the funding it committed to the scheme also.
Should all the money be recovered there is a nice £150 million profit in it for someone.....

This is my interpretation of how the funding, recoveries and payouts would work under the SOA
Under liquidation and DCS I am unsure as nobody really knows how the DCS will function.
What is apparent is that the funding for the DCS would flowback to the contributors earlier than the 60% payout threshold
and would therefore dilute the pot for creditos so that you would receive your funds slower initially depending on recoveries but may not affect the total recovered.
The big advantage in the SOA is in the assured payments to £50k or under depositors over the first 2 years
The advantages for higher value depositors are less obvious if non existant if recoveries are substantial


EPS/Bondholders

  • sleepless uk
  • 16/01/09 31/05/09
  • a depositor
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  • Tue, 31/03/2009 - 08:02

Podather,thank you for your much better clarification than we have had from Axa.One point which still confuses me,is the £10,000 which i believe is currently going through the system.Do they recover this from the first payment under any SOA,or is this left to become part of the 60% which you hope to get and your EPS payment is then claimed by IOMG from recovered funds at a later date as they have stated that they will not recover any monies until the 60% has been achieved.Confused ?? I am.


EPS/BONDHOLDERS - Sleepless UK

  • podather
  • 10/10/08 31/05/09
  • a depositor
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  • Tue, 31/03/2009 - 08:28

The £10,000 EPS payment is in effect an advance on the repayments to be received under either liquidation and DCS or the SOA.
For direct depositors who claim EPS the £10,000 will be deducted from the first assured payment of £20,000 or from the first dividend payment of 12.5% on or around the 31st July (should the scheme be accepted)
For bondholders I am not 100% but am almost certain that the collective payments of up to £10,000 for all the bondholders under a given insurance company account will be deducted from the dividend paid to that insurance company as a % of there deposit.
The issue for bondholders is will your insurance company pass on the £10,000 to you and then will they pass on the balance between 12.5% of your deposit less this £10,000.
There is no assured payments for bondholders so you will only get percentages not staged guaranteed value payments
I doubt very much that IOMG will wait until you have 60% back before reclaiming the £10,000 EPS advance.


Thank you

  • chipmunk
  • 13/10/08 31/05/09
  • unspecified
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  • Sat, 28/03/2009 - 20:56

Thanks so much for the time you spent answering this , I think it not only helps me get a better idea of the way things are moving but also should clarify a few issues for others....its difficult to keep up to date if unable to follow day to day issues and this update at least draws a line of the position at this juncture.


Thank you

  • Phil07
  • 15/10/08 31/05/09
  • unspecified
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  • Tue, 31/03/2009 - 06:34

Thanks Podfather for giving an answer in understandable English, that my Bond Co. (NU) have been able to furnish.


Thank you

  • tonvanderlinde@...
  • 23/02/09 30/05/09
  • a depositor
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  • Mon, 13/04/2009 - 11:12

Thank you podfather, I too invested £120k of my retiredment fund and to date have not aclue what I am about to receive back. You have made it a clearer picture


AEGON Scot Eq int.

  • tonvanderlinde@...
  • 23/02/09 30/05/09
  • a depositor
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  • Mon, 13/04/2009 - 16:17

Dear All,

I wonder if you could advice me on AEGON Scot Eq int.
My £120k was invested in KSFIoM through ASEi. via a IFA

As ASEi is a Dublin based company governed by the Irish FSA what liabilities does ASEi and indeed the Irish goverment have to Corporate investors like myself.


Get writing to UK MPs

  • dj
  • 07/11/08 31/05/09
  • a depositor
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  • Mon, 13/04/2009 - 11:37

The only real hope you have of getting more that £50K back over the next few years is the UK Government. They took your money and they have the power to give it back. MP's, on our side, are expressing suprise at the lack of of correspondance all MPs are getting.

We need to send a whole lot more to MPs, and start ignoring the 'not our constituent' or 'i'll get bacxk to you' nonsence which is used to filter out the day-to-day rubbish they get.

We are simply not making enought noise in the UK and it is deplorable!! Why is it is that news, BBC, Times, IOM Manx, etc, forums have 10 -100 messages frfom us? Unless we start putting 1000+ messages on EVERY SINGLE FORUM WE CAN FIND and sending 100+ emails to MPs every single day we may as well kiss goodbye to our savings. Sorry guys, but that is the bottom line, we need to up our game a hell of a lot more if we are going to get anywhere near 100% or 60% within the next few years. And up the game now as time is running out fast.


DEPOSITORS TASKS SHOULD BE SET OUT EVERY DAY

  • hippychickrobbed
  • 03/11/08 31/05/09
  • a depositor
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  • Mon, 13/04/2009 - 11:54

I never know why an action group has not been an action group, everyday there should be alerts to which mps, mhks, iomt, hmg treasury to be written to. I really think there should be a demo outside parliament in may, its warmer than and everyone friends and family, proxy protestors should be there.These are precious times that can make a difference if we all could just get on with it. Only that will bring our savings back,really thats the key to it all. I remember Ramsey peel who does not post anymore gave up and said we are going to get *******if we do not start knocking on peoples doors making a noise.


Thankyou podfather for soa for bondholders..

  • hippychickrobbed
  • 03/11/08 31/05/09
  • a depositor
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  • Mon, 13/04/2009 - 11:30

Thankyou for explaning the bondholder soa situation