11 February 2021
Member eligibility criteria
The first payment is a one-off member compensation payment, which will be made to all eligible members who hold an active policy when the transaction with Bain Capital completes; this is the date when Liverpool Victoria Financial Services Limited (LVFS) will transfer its business to Bain Capital.
The second payment is for With-profits members only, where they will, on top of the member compensation, also receive an enhanced policy payout when their policy comes to an end.
We expect the one-off member compensation payment to be made early in 2022 once the member, regulatory and legal processes have fully completed. Additionally, from that date the enhanced policy payouts will start to be made for policies coming to an end.
The actual amount of these payments will be determined by the Board after consultation with the With-Profits Committee. The Board’s decision will also be reviewed by an Independent Expert to ensure that the Board has achieved its primary aim of being fair to all members.
What you need to know
This payment is for all existing eligible members, and provides member compensation in the form of a cash payment. This one-off payment will be made to all existing eligible members with an active policy when the transaction with Bain Capital completes; this is the date when LVFS will transfer its business to Bain Capital.
To protect the interests of our current members, new business policies received from the 1 March 2021 will not be eligible for the one-off member compensation payment.
We expect payments will be made in early 2022 once the member, regulatory and legal processes have fully completed.
Please note that the payment will be per member, and not for each member qualifying policy held.
With-profits members will be eligible for the enhanced payout at policy exit if they hold a With-profits policy at the date of the Special General Meeting (SGM) – expected to be scheduled in the first half of 2021 - and the overall vote is in favour of the transaction. This will remain the case even if after this date your policy lapses or you leave.
Any With-profits policies taken out from the 1 March 2021 will still benefit from the enhanced payout for With-profits members at policy exit if they hold a With-profits policy at the date of the SGM and the overall vote is in favour of the transaction.
These eligibility criteria were discussed and agreed at Board and considered alongside advice from the With-Profits Committee who agreed the proposals were fair to With-profits members.
More Questions and Answers
The amount of these payments will be determined by the Board after consultation with the With-Profits Committee. The Board’s decision will also be reviewed by an Independent Expert to ensure that the Board has achieved its primary aim of being fair to all members.
Details on the value of these payments will be included in the voting pack that you will receive ahead of the vote on the transaction.
New policies taken out from the 1 March will not be entitled to the one-off member compensation payment. This is to ensure we protect the interests of our current members.
With-profits policies taken out from the 1 March will still be entitled to the enhanced payout at policy exit, providing the policy is active at the date of the Special General Meeting and the overall vote is in favour of the transaction.
Yes, there are three types of With-profits members who will not qualify for the enhanced payout at policy exit:
- Those who have a conventional pension where these policyholders already benefit from a guaranteed yearly income.
- RNPFN With-profits policies which are already in their own ring-fenced fund. These policyholders may benefit from distributions made from their fund’s inherited estate in the form of either a terminal bonus enhancement or special bonus.
- Teachers With-profits policies which are already in their own ring-fenced fund. These policyholders may benefit from distributions made from their fund’s inherited estate in the form of either a terminal bonus enhancement or special bonus.
If you do not hold an active With-profits policy on the date of the SGM, you would not qualify for the enhanced exit payout.
However, if you hold a With-profits policy that matures after the SGM, and before the transaction fully completes at Part VII transfer date, we will retrospectively add the enhanced uplift to your policy exit value.
The Part VII transfer is the legal step required to fully complete the transaction and occurs after members and our regulators have approved the proposals. Full details of the Part VII transfer process will be communicated to members ahead of it taking place.
Customers who have general insurance products (for example car and home insurance) are also not members - these products are sold by LV= General Insurance Group, a subsidiary of Allianz.