As part of the transaction, it is expected that Equitable Lifes policies will transfer to Reliance Life under a Part VII transfer and its with-profits policies
will be converted to unit-linked policies under a scheme of arrangement, with policyholders benefiting from an increase in Equitable Lifes current expected capital distribution.
The society now manages about PS1bn on behalf of its members and policyholders, including through 40,000 with-profits policies
, 32,000 life and pensions policies and 13,000 home and buildings insurance policies.
The mutual is set to increase the value of members' with-profits policies
by 12.5% for those whose investments mature or who leave the society after April 1 this year.
are struggling to hold their own against other types of investment, research has revealed.
The providers are in the middle of the annual reporting season when they announce the rise in the value of with-profits policies
, based on returns in 2009.
Payments are going to investors holding with-profits policies
in Aviva's former CGNU Life and CULAC with-profits funds.
When the world's financial markets crumpled last year, many small investors might have felt safe in the knowledge that they had cash salted away in with-profits policies
held at big insurance companies.
Bosses blame stock market turmoil for cutting the final bonus paid on with-profits policies
, reducing their maturity value by, typically, five to nine per cent.
Despite rising stock markets, payments on the majority of with-profits policies
have been cut for the fourth time in two years, with some bonuses reduced to 0%.
, which aim to smooth out stock market volatility by spreading returns across the life of the product,are often taken out as pensions or to pay off mortgages.
But policyholders would face lower returns on with-profits policies
, and seven months of growth in policy values that was lost earlier this year wouldn't be restored.
The money goes into special investment plans - usually safe with-profits policies
where the value can never fall.