The majority of the 82,000 Irish people who hold insurance policies with Standard Life stand to gain between £3,400 and £8,200 if the company is demutualised. The Scottish life assurance company will hold a meeting on June 27th at which its members will be asked to decide whether it should remain a mutually-owned group or seek a stock market listing that would trigger a windfall payment. Irish policyholders will be invited to return their votes by post to the company.
The company has stressed that the windfalls may vary widely and could be significantly below the amounts being suggested by the group of members seeking the demutualisation vote.
Announcing the date for the meeting yesterday, Standard Life group managing director Mr Scott Bell urged members to retain the status quo.
"Mutuality is at the heart of Standard Life's success and serves our members well, providing the benefits of top-performing policies and long-term financial security, and we believe these benefits should be preserved for the future. We are competitive, efficient and financially strong and there is no business case to demutualise," he said. Only investors who hold withprofits Standard Life policies will be eligible to receive free shares and the amount they receive will depend on how long they have held the policy and its surrender value.
Standard Life estimates that if it was valued at £12 billion sterling (£16.4 million) on flotation, members with qualifying policies would be entitled to a minimum of £250 sterling (£342). It suggests about half of its members would receive around £2,500 sterling (£3,400) while fewer than one in five would be entitled to payments of around £6,000 sterling (£8,200).
Standard Life is the largest mutual life assurer in Europe but is being forced to consider changing its status due to pressure from some of its members. Another Scottish mutual life assurer, Scottish Provident, has also recently announced it is reviewing its status and has retained advisers to decide whether it should convert to a publicly quoted company.
Mr Gordon Hart, one of the campaigners instrumental in securing the review at Scottish Provident has now turned his attention to Friends Provident. He is urging its policyholders to back the call for an emergency general meeting at its annual meeting on May 31st. If approved, Mr Hart suggests Friend Provident members who hold with-profits policies could expect a minimum windfall of £1,000 sterling (£1,333).