SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of March, 2007
PRUDENTIAL PUBLIC LIMITED COMPANY
(Translation of registrant's name into English)
LAURENCE POUNTNEY HILL,
LONDON, EC4R 0HH, ENGLAND
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82-
Enclosures: Policyholder Advocate
Embargo: 7.01am Thursday 15 March 2007
PRUDENTIAL CONSIDERING REATTRIBUTION OF INHERITED ESTATE, POLICYHOLDER ADVOCATE
NOMINATED TO REPRESENT POLICYHOLDERS
Prudential is considering a reattribution of the inherited estate held in the
with-profits sub-fund (WPSF) of The Prudential Assurance Company Limited (PAC).
Prudential has believed for many years that it would be beneficial if there was
greater clarity as to the status of the PAC inherited estate. It will however
only proceed with a reattribution if this is in the interests of both
policyholders and shareholders.
No decision has as yet been made to proceed with a reattribution and
policyholders need take no action at this stage.
Under rules introduced by the Financial Services Authority (FSA) in 2005, a
Policyholder Advocate (PHA) must be appointed to represent the interests of
with-profits policyholders. These FSA rules also require a policyholder advocate
to be free from any conflict of interest that might be, or might appear to be,
detrimental to the interests of policyholders.
Prudential supports the FSA's introduction of the PHA as it provides
policyholders with an independent negotiator on a reattribution of the inherited
estate.
As such, Prudential is pleased to announce that PAC has nominated Peter Bloxham
as the proposed PHA and that the FSA has approved the nomination. Mr Bloxham has
many years experience representing clients involved in complex cases where there
are competing claims on assets. He also has significant experience of the
insurance industry. He recently retired as a partner at Freshfields Bruckhaus
Deringer, a leading international law firm.
As the nominated PHA, Mr Bloxham's initial period of work will include:
- Establishing an independent office
- Setting up an independent technical team including actuarial and legal
support
- Reviewing and analysing PAC's with-profits business
- Preparing plans for consultation with policyholders on the proposed
reattribution
- Finalising his terms of reference
The appointment of the PHA will only be made if Prudential is fully satisfied
that a reattribution is in the interests of both policyholders and
shareholders. Formal appointment of the PHA could take place later this year.
If Prudential decides to proceed with a reattribution, then as the appointed
PHA, Mr Bloxham would undertake a period of consultation with policyholders
before negotiating the terms of the reattribution with Prudential on behalf of
with-profits policyholders.
Nick Prettejohn, Chief Executive of Prudential's UK Insurance Operations said:
"I am delighted the FSA and the Board of Prudential Assurance Company have
approved Peter Bloxham's nomination.
"If we decide to proceed with a reattribution, Peter will bring extensive
practical experience of resolving competing claims to the role of independent
policyholder advocate. He is very aware of the customer issues raised by a
reattribution and I am sure he will do an excellent job in representing the
interests of our with-profits policyholders."
Peter Bloxham said: "This is a complex project with a considerable amount of
information to be analysed and reviewed. My principal task over the coming
months will be to familiarise myself with Prudential's with-profits business.
"I would hope to be in a position, subject to being formally appointed, to begin
a dialogue with policyholders in the autumn. Should a reattribution proceed I
look forward to negotiating on behalf of Prudential's with-profits policyholders
to obtain the best possible outcome for them."
Policyholders need take no action at this stage. However, in order to protect
the interests of existing policyholders of PAC's WPSF, the following will apply:
- To be eligible for a payment in relation to the proposed reattribution,
policyholders must have held an eligible policy in the WPSF on the
Eligibility Date. The Eligibility Date is 14 March 2007, the day before the
date of this announcement. If you are taking out a new with-profits policy
after this date, it will not carry any interest in any possible future
distribution of the inherited estate in the WPSF and therefore will not
qualify for any payment from the proposed reattribution of that inherited
estate. Existing policyholders who increase their with-profits investment
after this date (through, for instance, irregular premium payments or by
switching investments into the WPSF) should be aware that this is unlikely
to increase the size of any cash payment or further bonus additions to which
they may be entitled through any reattribution process.
- Existing policyholders who reduce their with-profits investments (through,
for instance, surrendering their policy, transferring all or part of their
investment out of with-profits, taking their pension benefits early, or
stopping making payments to their policy) are likely to lose any entitlement
they may have to receive a payment in connection with the reattribution, or
reduce the amount of the payment that may otherwise be due to them.
- Policyholders should be aware that the eligibility rules described here
are subject to agreement with the PHA, taking account also of the views of
the Financial Services Authority. In the event that this reattribution does
not proceed, new policies taken out and increases to with-profits
investments made after the Eligibility Date will count towards a
policyholder's participation in any possible subsequent reattribution or
distribution of the inherited estate in the same way as any other
with-profits policy or investments.
ENDS
Enquiries:
Media Investors/Analysts
Jon Bunn +44 20 7548 3559 James Matthews +44 20 7548 3561
William Baldwin-Charles +44 20 7548 3719 Valerie Pariente +44 20 7548 3511
Notes to Editor:
1. Policyholders with questions on the reattribution proposals can call
Prudential's dedicated Reattribution Service Centre on 0845 300 2641,
8am - 8pm Monday to Friday. Alternatively policyholders can write to
Prudential, Stirling, FK9 4UE.
2. More information on the proposed reattribution process can be found at
www.pru.co.uk/reattribution
3. The Policyholder Advocate has established a website at
www.prupolicyholdersadvocate.com
4. About the Inherited Estate and reattribution
The inherited estate - or 'estate' as it is often called - is money that has
built up in the With-Profits Sub-Fund over many years from a number of sources,
including contributions from shareholders. It is essentially an amount of money
in excess of the amount we expect to pay out to existing policyholders. It is
available to support current and future business by providing the benefits
associated with smoothing and guarantees, permitting investment flexibility for
the fund's assets and maintaining the solvency of the fund. Reattribution of the
inherited estate benefits policyholders in the With-Profits Sub-Fund in the
short term, by way of cash payments or the addition of a further bonus to their
policies, in return for giving up the possibility of sharing in any potential
future distribution from the estate. Reattribution will occur only if it is in
the interests of policyholders and shareholders.
5. Peter Bloxham
Peter Bloxham is 55, and was until recently a partner in the international law
firm, Freshfields Bruckhaus Deringer. Peter founded the Restructuring &
Insolvency practice at the firm in the mid-1990s, and headed it until 2005. His
work involved complex investigations and negotiations with very large
organisations.
He qualified as a solicitor in 1977, joined Freshfields in the same year and
became a partner in 1983.
Peter worked on many high profile cases, including BCCI, Barings, British
Energy, Boo.com, Enron and Eurotunnel. He was a regular adviser to Lloyd's of
London, including major involvement in the formulation and implementation of the
Reconstruction and Renewal proposals.
Peter's clients included the Bank of England, the Royal Bank of Scotland and UBS
and he has advised the Financial Services Compensation Scheme.
6. Reattribution Expert
Prudential has also announced today the nomination of Nick Dumbreck as
Reattribution Expert. As Reattribution Expert, Mr Dumbreck will assess
objectively the reattribution proposals, and will prepare a report for the Court
on the implications of the proposals for policyholder security and benefit
expectations. Mr Dumbreck is a consultant with Watson Wyatt and currently
President of the Institute of Actuaries.
7. About Prudential
Prudential plc is a company incorporated and with its principal place of
business in England, and it and its affiliated companies constitute one of the
world's leading financial services groups. It provides insurance and financial
services directly and through its subsidiaries and affiliates throughout the
world. It has been in existence for over 150 years and has GBP250.7 billion in
assets under management as at 31st December 2006. Prudential plc is not
affiliated in any manner with Prudential Financial, Inc, a company whose
principal place of business is in the United States of America.
The Prudential Assurance Company Limited is a wholly-owned subsidiary of
Prudential plc and is authorised by the FSA to carry on long-term insurance
business.
Forward-Looking Statements
This statement may contain certain "forward-looking statements" with respect to
certain of Prudential's plans and its current goals and expectations relating to
its future financial condition, performance, results, strategy and objectives.
Statements containing the words "believes", "intends", "expects", "plans", "
seeks" and "anticipates", and words of similar meaning, are forward-looking. By
their nature, all forward-looking statements involve risk and uncertainty
because they relate to future events and circumstances which are beyond
Prudential's control including among other things, UK domestic and global
economic and business conditions, market related risks such as fluctuations in
interest rates and exchange rates, and the performance of financial markets
generally; the policies and actions of regulatory authorities, the impact of
competition, inflation, and deflation; experience in particular with regard to
mortality and morbidity trends, lapse rates and policy renewal rates; the
timing, impact and other uncertainties of future acquisitions or combinations
within relevant industries; and the impact of changes in capital, solvency or
accounting standards, and tax and other legislation and regulations in the
jurisdictions in which Prudential and its affiliates operate. This may for
example result in changes to assumptions used for determining results of
operations or re-estimations of reserves for future policy benefits. As a
result, Prudential's actual future financial condition, performance and results
may differ materially from the plans, goals, and expectations set forth in
Prudential's forward-looking statements. Prudential undertakes no obligation to
update the forward-looking statements contained in this statement or any other
forward-looking statements it may make.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date 15 March, 2007
PRUDENTIAL PUBLIC LIMITED COMPANY
By: /s/ Jon Bunn,
Jon Bunn,
Director of Public Relations