Investments – With-profits ISA
Britannic Assurance plc
Term 1
What did we think was unfair?
A term allowed the firm to change conditions of the contract.
Why did we think it was unfair?
Although customers were given advance notice of any changes, they were not able to leave the contract freely, that is without paying a withdrawal fee, if they were unhappy with them.
What has the firm done?
The firm agreed (in June 2004) that in practice it would let customers leave the contract freely if they are not happy with the changes to it.
The firm has also agreed (in March 2006) to explain in their next annual statement to customers that if the firm changes conditions of the contract it will:
- inform customers with reasonable notice; and
- let customers leave the contract freely if they are unhappy with the changes.
Old term
'The manager may amend any of these terms and conditions. In the event that the manager has reason to believe that any proposed variation will act to your disadvantage you will be given at least one month's prior written notice of the variation The manager is entitled to exercise this right without obtaining the consent of any parties entitled to enforce these conditions.'
Term 2
What did we think was unfair?
A term outlined what will happen for a market value adjustment (MVA) if units are cancelled before death or the guarantee dates.
Why did we think it was unfair?
The firm did not express the term in plain and easy to understand language, so customers might not understand how the firm works out the MVA.
What has the firm done?
The firm has agreed to explain what this term means in its next annual statement to customers.
Old term
'If units are cancelled at any [time other than a guarantee date or death]:
(a) Britannic will calculate an underlying value of the policy which reflects the movement in market values of a basket of representative assets over the period that the units have been held;
(b) the Bid Price will be 100p unless the calculated underlying value of the policy produces a result below 100p and in this event the Bid Price may be reduced to below 100p after taking advice from the Actuary, as appropriate.'
What next?
Read more agreements from firms – see Unfair contracts.
Read more about Investments.
Read more about With-profits policies.
Read more about our work on Unfair contract terms.