MPL has said that some UK life offices are deliberately hindering the traded endowment market, to the detriment of policyholders, brokers and buyers - leading it to call for better practice when it comes to cracking down.
Jeremy Leach, MPL’s managing director, believes that this has become far worse over the course of the year, with added red tape proving to be an unnecessary obstruction.
"Endowments have often been a bad enough investment for policyholders as it is," he said, "without life offices damaging the potential resale of these policies that would at least give them the chance of obtaining a better price on the tertiary market.
"It is only recently that the FSA has forced insurance companies to advise policyholders that they have an alternative to surrendering their policies and they are evidently unhappy about it.”
Leach added that iInsurers were just using bad administration as an excuse, and in fact the firms should be providing a far higher level of care to loyal customers.
MPL said it had encountered obstructive behaviour from several life companies that appear keen to create barriers to policies being sold in the second-hand market.
Prevention tactics include delayed and inaccurate responses to letters, aggressive phone calls and refusals to discuss re-assigning beneficiaries of policies.
Insurers also refused to administer the transfer of policies unless buyers can provide certain information. For example, they can insist on proof of the age of a life assured, even though buyers such as MPL will have had no contact with the party selling the policy and the insurer had no such requirement to issue the policy in the first place.
