Market value reductions on with-profits funds will have to apply to shareholder dividends as well as...
Market value reductions on with-profits funds will have to apply to shareholder dividends as well as policyholder bonuses, under FSA proposals. According to the regulator, this could result in a reallocation of payouts from shareholders to policyholders in the region of 3% per annum, although this would vary by market conditions and the size of the firm involved. MVRs are applied by with-profits funds to reduce the amount payable to policyholders on early surrender, typically if the face value of a policy is higher than underlying assets. In such circumstances, MVRs can reduce bonuses th...
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