To ask the Chancellor of the Exchequer if he will set rules for the appointment of the policyholder advocate which ensure that the person is appointed by someone independent of the company holding the orphan assets; what this advocate's role is; to whom he is responsible; who pays him his remuneration; on what basis the advocate can agree to a different division of the orphan assets on reattribution which is a higher percentage for the shareholders than that required on distribution; how the proportions upon reattribution get decided, and by whom, in cases where the independent policyholder advocate indicates dissent to that which is proposed; and if he will make a statement. (131107)

Supervision of reattribution of inherited estate is the responsibility of the Financial Services Authority (FSA). FSA rules require the appointment of a policyholder advocate either nominated or approved by the FSA. The purpose of the policyholder advocate is to ensure that there will be an independent figure representing policyholders' interests to the firm. The precise role of the policyholder advocate depends on the nature of the firm and its proposed reattribution, but the FSA expects the proposed policyholder advocate to be free from any conflicts of interest which may be detrimental to the interests of the policyholders they represent. Typically, the policyholder advocate will negotiate with the firm on behalf of the with-profits policyholders and advise policyholders on issues such as the allocation of benefits and eligibility. He will also prepare a report on these issues. The FSA expects shareholders to meet a reasonable proportion of the policyholder advocate's costs, for the arrangement to be fair, and for the policyholder advocate to confirm that he is satisfied with it. If no agreement on reattribution is reached, the FSA expects all costs to be met by the party which initiated the process (typically the shareholders). The precise basis on which assets are reattributed will depend on the nature of the firm and the proposed reattribution and is a matter for negotiation between the firm and the policyholder advocate. If the firm decides to make an offer to policyholders which does not have the support of the policyholder advocate, it must tell policyholders why it is doing so. Policyholders may then decide individually whether or not to accept the offer, taking into account the recommendation of the policyholder advocate.

To ask the Chancellor of the Exchequer (1) if he will take steps to ensure (a) fairness to policyholders in the treatment of orphan assets and (b) that unreasonable dividends do not accrue to shareholders from orphan assets does not happen; and if he will make a statement; (131108)

I refer the hon. Gentleman to the answer I gave him on 29 November 2006, Official Report, column 729W.

To ask the Chancellor of the Exchequer whether a (a) policyholder and (b) shareholder is liable for tax on his share of a reallocated orphan asset. (131112)

A policyholder is liable to tax on any distribution of the inherited estate to him as a bonus in the same way as he is liable on any other gain from a life insurance policy. A shareholder is liable to tax on any distribution of the inherited estate in the same way as on any other dividend or distribution by the company to its shareholders.