Ongoing Life Company policy charges - assignment of claims

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
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Posted: Sat, 03/10/2015 - 13:09

Following a number of disturbing comments elsewhere on this site by bondholders unable to terminate life policies whose sole remaining asset is their claim against KSF and for which they are obliged to continue to pay charges likely to well exceed any future dividends in the liquidation, I raised this issue with Mike Simpson, who – while this is not strictly a matter for the liquidation - promised to talk to the companies to see whether a mutually acceptable solution could be found.

He has now got back to me with the following response:

“ I have spoken to directors at several of the life companies regarding the policy charges issue. Their positions were all slightly different, but the following comments were made by one or more of them:
- They are willing to look at issues on a case by case basis
- They are willing to consider redirections provided overdue charges are paid
- Whilst some have been strict on applying charges, they have not been charging interest where policies have gone overdrawn.

The cleanest resolution from their point of view is an assignment, which in the Isle of Man requires a Court Order. This involves legal fees, however if a number of policyholders at a life company wanted to do this, the cost could be shared. Any policyholders who wish to surrender their policies and have the claim against KSF assigned should contact the life company and ask them to contact me if they need to be guided through the process.”

I'm not sure how helpful that may be, but I post it here for information.

Reassigning a claim from the life company to the bondholder, thus allowing the policy to be terminated, would indeed be the best outcome, but the cost of so doing may be prohibitive unless affected bondholders with the same company are able to join together. Clearly the best option would be for the companies to take the initiative as only they know who are their affected clients, but I see little hope of that. Maybe those wishing to pursue this avenue could use this site to make contact and link up with others in the same situation. I don't know what the legal costs would amount to and have asked Mr Simpson if he can give me some idea, but as yet no response.

Failing that, it certainly seems worth persisting with individual requests for a better deal “on a case by case basis”, as some have already done successfully.

If there are any further developments, I will update this post here.

Update 4 Oct 2015:
Mike Simpson has now informed me that he has had further discussions with one of the life companies and will be including a comment on this issue in the forthcoming quarterly update to be prepared in the next few days.

Update 23 Oct 2015:
The Liquidator continues to look at ways in which he can assist policyholders who wish the life companies to assign their claims over to them (the policy holders) so that their policies can be closed down and will update the bank website with any developments.
See his statement in the latest quarterly report here:

Update from the Liquidator 3 Dec 2015:
" ... In order to assist the life companies and their policyholders, I have applied to Court and have received an Order which permits me to accept assignments from the life companies without the need for a Court Order. This Order does not compel the life companies to agree to requests from their policyholders for assignment, nor does it oblige me to approve them, however it does remove the final costly step from the assignment process."

This is excellent news. As I understand it, such an assignment, if agreed, will enable the bondholder to receive any future interest payments directly from the Liquidator and for those whose sole remaining asset is their claim against KSF to terminate their policy and thus pay no further charges.
Any bondholder wishing to take advantage of this opportunity should contact his/her life company.

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BondholdersPolicy assignment

  • chb
  • 10/10/08 15/10/09
  • a depositor
  • Offline
  • Sun, 25/10/2015 - 07:56

Thank you for following up Anrigaut. It's really good to know that questions are taken up and investigated and that progress is made! The replies definitely represent a ray of hope; let's hope that Mike can use his influence to make the assignment process easier. It's really not easy talking to (at least some of the) major Life Insurance companies as an individual. Hopefully, Court Orders can be avoided in reassigning the policy. Either way, I'm sure this website can continue to provide a place for the Bond holders amongst us to work together, as it has done so brilliantly for everyone involved with KSF since Oct '08.

Assignment of claims

  • anrigaut
  • 19/10/08 30/10/09
  • a depositor
  • Offline
  • Thu, 03/12/2015 - 13:30

Excellent news announced today by Mike Simpson - see update in my post at the head of this thread. Thanks to his initiative (prompted I may say by repeated requests from both myself and Knife Edge and following a specific suggestion by the latter), the life companies can now request assignments of claims in KSF to individual bondholders without the need for a Court Order.

You will of course still have to persuade your Life Company to request an assignment of your claim, but this should surely help. I hope all concerned will take this opportunity to push for such assignments. It would be good if those who do could report here on progress.

PS. I believe that this ruling applies only to assignments by the Life Companies, who were all named in the Court application. Any other assignments between individuals will still require a Court Order.


  • sambururob
  • 10/10/08 n/a (free)
  • a depositor
  • Offline
  • Sat, 05/12/2015 - 10:46

Well done to Anrigaut and Knife Edge. This does not effect me and Wendy but is going to really help some. This is a meaningful victory with real financial benefits for some. Great work.