€7,000 payments for Scots Prov members

 

About 75,600 Irish former members of the Scottish Provident will receive average payments of £4,400 sterling (¤7,112 at current exchange rates) as compensation for giving up their membership rights following the demutualisation of the former mutual society.

While payouts to individuals will vary widely, all qualifying policyholders are guaranteed a minimum of £500 sterling.

Irish policyholders will share a payout of £300 million sterling with payments to Irish customers accounting for about 17 per cent of the total compensation of £1.8 billion being paid to some 450,000 former Scottish Provident members.

Payments are expected to be made by the end of March. Irish policyholders can opt to receive payment in sterling or euro - in the case of customers who opt for euro, the exact amount paid will depend on the exchange rate at the time the payment is made.

Each qualifying former member will receive a fixed payment of £500 sterling. Qualifying with-profit policyholders will receive additional payments based on the type and size of policy they hold and the length of time that policy has been in force.

About 68,000 of the Irish policyholders have with-profit policies and qualify for payments in addition to the fixed £500 payment.

The biggest payouts will go to the longest standing with-profit policyholders who have built up significant savings with Scottish Provident. With the payout structured to reward longer term policyholders, the 30 to 40 per cent of the customer base who took out with-profit policies in recent years in anticipation of demutualisation windfalls will receive relatively small payments.

Scottish Provident shed its mutual status as part of the takeover of the 160-year-old life assurance operation by Abbey National.

Only people who held with-profit policies before the April 6th 2000 cut-off date and maintained that policy continuously until the date the business was transferred in August 2001 - or people who held a Scottish Provident policy issued before January 1st 1996 - are eligible for compensation.

These customers will have received documentation from Scottish Provident informing them of their rights and advising them how to calculate due compensation.