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Insurance

Volume 87: debated on Monday 18 November 1985

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asked the Secretary of State for Trade and Industry whether he will introduce legislation to require all insurance companies to pay interest on life policies from the day on which the policy becomes due.

Whilst my right hon. and learned Friend has no plans to introduce such legislation, I welcome the fact that in the forthcoming revision of Association of British Insurers' Statement of Long-Term Insurance Practice, which will contain a number of changes, there will be a revised requirement to pay interest in all cases from a date two months after the happening of the insured event (death or maturity or from the date on which the unit-linking ceased.) This does not of course preclude companies from paying interest from an earlier date, but builds into the statement current industry good practice.