Equitable Life has reached an agreement to transfer 31,000 annuities, valued at circa £875m, to Canada Life, stating that policyholders would be best served by this.
It intends to transfer the policies to Canada Life under a Part VII scheme, subject to completion of the court process, by the end of 2015.
Equitable Life admitted it is facing up to the fact that the run-off of its annuity book is considerably longer than its with-profits business.
The board decided that since with-profits policyholders provide the capital to support non-profit annuities, the long term interests of all its policyholders are best served by transferring the annuity payment obligations to Canada Life.
Chris Wiscarson, Equitable Life’s chief executive, added: “This transfer is one more important step in releasing capital for distribution to our with-profits policyholders.”
This follows Equitable Life’s decision in March 2012 to stop offering maturing policyholders annuities when the company struck an agreement with Canada Life, which it said would give it easier access to capital at that time.
The company said in a statement at that time it would continue encouraging policyholders to shop around and take advice to compare annuity rates from the wider market with those offered by Canada Life.
ruth.gillbe@ft.com
