Oaklife Assurance Company Limited

Oaklife Assurance Company Limited ("Oaklife") was authorised under the Life Assurance and Unit Trust Regulatory Organisation ("LAUTRO") and wrote long-term business from the 1960's to February 1992, when its authorisation was withdrawn. Although there was some direct business, the majority of the business was acquired through appointed representatives and later through a direct sales force.

Since our appointment as Liquidators of Oaklife on 14 September 1993, and in accordance with the Insurance Companies Act, efforts have been made to transfer Oaklife's life assurance business to another insurance company in order to provide policyholders with continuity of cover. Over the period we approached more than 20 insurance companies but none have been able to accept a transfer. Negotiations with one major insurance company continued for a period of some 18 months, but eventually it withdrew despite the considerable time and expense incurred by both sides. Oaklife's business was considered too small and contains too wide a variety of policies to be an attractive proposition for any potential transferee insurance company.

During the liquidation, we have assisted the Financial Services Compensation Scheme ("FSCS") (previously Policyholders Protection Board) in the performance of its duties towards policyholders. This includes providing compensation to policyholders affected by the liquidation of Oaklife as well as attempting to find insurers who would be willing to issue substitute policies. The Liquidators have assisted the FSCS with this task by making lengthy enquiries within the insurance market and by identifying a company that was willing to offer substitute policies to a certain class of policyholders.

The outcome with respect to the two key policy categories is:

1. Life policyholders - Certain unit-linked policyholders were offered the option of a substitute policy or the opportunity to apply to the FSCS for compensation. The remainder were offered compensation.

2. Pension policyholders - The focus of the Liquidators has been on the most appropriate method of compensation for pension policyholders. This gave rise to a number of complex issues, principally in the area of taxation. The Liquidators worked with the relevant authorities and resolved these issues. Policyholders with Protected Rights were offered the option to transfer their policy value to another pension provider of their choice or reinstatement into SERPS. Policyholders with Non Protected Rights were offered the option to transfer to another pension provider of their choice or receive a cash sum.