Scottish Life vote 'undemocratic'

By DAVID BUDWORTH
Updated:

 

SCOTTISH LIFE members have voted in favour of a takeover by Royal London ending its mutual status and triggering the payment of cash windfalls. But a band of disgruntled policyholders blocked from voting at the meeting have pledged to challenge the decision in court, slamming the vote as undemocratic.

The Scottish Life Action Group, led by financial adviser Terry Bignall of Farningdon, Oxfordshire, says that the ballot should be declared invalid as tens of thousands of policyholders were denied a vote. Scottish Life's sale has to be ratified by the Court of Session in Edinburgh before it can proceed.

At today's extraordinary general meeting, Scottish Life's board received the support of 98.3% of those who voted, far exceeding the 75% required to pass the special resolution. Only 1,622 policyholders opposed the plan to de-mutualise and make windfall payments, with 95,761 in favour.

But although this looks like a sign of overwhelming support for Scottish Life's sale it only represents the views of a minority of policyholders. Scottish Life has 560,000 policyholders, and only 220,000 of those had membership rights and were eligible to vote. More than 60% of policyholders were denied this privilege.

Bignall said: 'If we have sufficient support we will put our view to the court that the vote is invalid because it disregards the views of most policyholders.'

Those who missed out on the chance to vote were mainly homeowners who assigned their Scottish Life plans to mortgage lenders. By assigning, which was standard practice in the Eighties and early Nineties, they terminated their membership of the life office, though were not told at the time.

Holders of personal and occupational pension plans were also unable to vote. Scottish Life's rules say that such policyholders are not members because the trustees of their policies are deemed to own membership rights.

But despite these signs of dissent, Brian Duffin, group chief executive of Scottish Life, said the result was good news for all policyholders. 'Today's result is exactly what we were hoping for and we are very pleased.

'The transaction makes sense in many ways, but first and foremost it provides our members and policyholders with excellent value in cash and additional policy benefits, as well as enhanced financial security.'

If the deal goes ahead as planned the takeover will be completed on 1 July.

• Policyholders can contact Scottish Life Action Group online at www.scottishlifeactiongroup.com

If you are a policyholder and unsure of how you will benefit from the deal, Scottish Life has set up a helpline on 0845 203 0246. From outside the UK, call +44 (0) 131 456 7493. Lines are open Monday to Friday from 9am to 5pm. Alternatively, e-mail helpline@scottishlife.co.uk

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