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Latest Press Releases And Comments

Here we cover all the very latest news. If you have a specific enquiry or something you’d like to find out about, please get in touch. Contact Martin Shaw at AFM via email martin@financialmutuals.org or call 0788 754 7195.

27 January 2011

Schoolteachers Friendly Society announces transfer of engagements with Oddfellows

The Schoolteachers Friendly Society (SFS) has today announced plans to transfer engagements with the Order of Odd Fellows Manchester Unity Friendly Society (the Oddfellows), one of the largest and oldest friendly societies in the United Kingdom.

The agreement, which is expected to be finalised on or around the 31st March 2011, is a result of upcoming Solvency II legislation. Following the transfer, the Oddfellows will have assets of over £400m and a combined membership base of over 200,000 members.

A spokesperson (PLEASE ADD) for the Schoolteachers Friendly Society commented:

“The SFS Board of Management felt that society wouldn’t be able to build up sufficient capital reserves to be able to meet this new capital requirement by the beginning of 2013 without significantly reducing the bonuses paid to its members over the next few years. In the interest of members and the future of the society, the Board of Management decided that a transfer of engagements to another society was the best option. We believe that by joining forces with a much larger mutual that the strengthened capital base will make the businesses stronger and able to take advantage of more future opportunities as they arise.”

Following the transfer to the Oddfellows, SFS will continue to operate under the Schoolteachers brand and the Schoolteachers business will continue to be managed by the SFS’s existing staff from its current office in Liverpool. The SFS will also have representation on the Oddfellows main Board and management committees.

Martin Shaw, Chief Executive at the Association of Financial Mutuals commented on the news:

“The decision taken by The School Teachers Friendly Society to transfer engagements with Oddfellows, as well as the recent news that the Communication Workers Friendly Society plans to merge with Forester Life, clearly demonstrates the mutual sector’s commitment to the best interests of its members. These arrangements follow the long tradition of mutuals working together to maintain the strength of the sector and to develop the highest standards of service to customers. Due to pressures of legislation, the decline in the life insurance industry means that many businesses, smaller firms in particular, are constantly assessing their strategy and will continue to consider similar ventures to best meet the interests of their members.”

For more information please contact:

Chief Executive of Schoolteachers Friendly Society, Steve Code on:  0151 724 1930

Chief Executive of the Independent Order of Odd Fellows Manchester Unity Friendly Society, Philip Howcroft on:  0161 832 9361

Chief Executive at the Association of Financial Mutuals, Martin Shaw on: 0788 754 7195

Notes to Editors:

On the 26th November 2010 the Board of Management of the Schoolteachers Friendly Society (the SFS) wrote to its Members recommending that they should vote in favour of a proposed transfer of engagements between the SFS and the Independent Order of Odd Fellows Manchester Unity Friendly Society (the Oddfellows).

At a Special General Meeting held on 15th January 2011, the members of the SFS voted overwhelmingly in favour of a transfer of engagements to the Oddfellows.  Approval to the transfer has been received from the Financial Services Authority.  The Oddfellows was established in 1810 as a mutual self help society, providing for workers and their families in times of need. Oddfellows is one of the largest and oldest friendly societies in the United Kingdom. It, (along with other friendly societies), laid the foundations for the welfare state. The fraternal side of their business provides social activities, care, support and non contractual benefits to circa 70,000 members through a UK-wide network of 154 branches. As well as caring for its own members, they have a tradition of support for both local and national charities. The support for both Branches and members is provided by a central office in Manchester.

Following the transfer, the Oddfellows will have assets of over £400m and a combined membership base of over 200,000 members. Both Boards believe that in joining forces the strengthened capital base will make the businesses stronger and able to take advantage of any future opportunities as they arise

Schoolteachers Friendly Society announces transfer of engagements with Oddfellows

The Schoolteachers Friendly Society (SFS) has today announced plans to transfer engagements with the Order of Odd Fellows Manchester Unity Friendly Society (the Oddfellows), one of the largest and oldest friendly societies in the United Kingdom.

The agreement, which is expected to be finalised on or around the 31st March 2011, is a result of upcoming Solvency II legislation. Following the transfer, the Oddfellows will have assets of over £400m and a combined membership base of over 200,000 members.

A spokesperson (PLEASE ADD) for the Schoolteachers Friendly Society commented:

“The SFS Board of Management felt that society wouldn’t be able to build up sufficient capital reserves to be able to meet this new capital requirement by the beginning of 2013 without significantly reducing the bonuses paid to its members over the next few years. In the interest of members and the future of the society, the Board of Management decided that a transfer of engagements to another society was the best option. We believe that by joining forces with a much larger mutual that the strengthened capital base will make the businesses stronger and able to take advantage of more future opportunities as they arise.”

Following the transfer to the Oddfellows, SFS will continue to operate under the Schoolteachers brand and the Schoolteachers business will continue to be managed by the SFS’s existing staff from its current office in Liverpool. The SFS will also have representation on the Oddfellows main Board and management committees.

Martin Shaw, Chief Executive at the Association of Financial Mutuals commented on the news:

“The decision taken by The School Teachers Friendly Society to transfer engagements with Oddfellows, as well as the recent news that the Communication Workers Friendly Society plans to merge with Forester Life, clearly demonstrates the mutual sector’s commitment to the best interests of its members. These arrangements follow the long tradition of mutuals working together to maintain the strength of the sector and to develop the highest standards of service to customers. Due to pressures of legislation, the decline in the life insurance industry means that many businesses, smaller firms in particular, are constantly assessing their strategy and will continue to consider similar ventures to best meet the interests of their members.”

For more information please contact:

Chief Executive of Schoolteachers Friendly Society, Steve Code on:  0151 724 1930

Chief Executive of the Independent Order of Odd Fellows Manchester Unity Friendly Society, Philip Howcroft on:  0161 832 9361

Chief Executive at the Association of Financial Mutuals, Martin Shaw on: 0788 754 7195

Notes to Editors:

On the 26th November 2010 the Board of Management of the Schoolteachers Friendly Society (the SFS) wrote to its Members recommending that they should vote in favour of a proposed transfer of engagements between the SFS and the Independent Order of Odd Fellows Manchester Unity Friendly Society (the Oddfellows).

At a Special General Meeting held on 15th January 2011, the members of the SFS voted overwhelmingly in favour of a transfer of engagements to the Oddfellows.  Approval to the transfer has been received from the Financial Services Authority.  The Oddfellows was established in 1810 as a mutual self help society, providing for workers and their families in times of need. Oddfellows is one of the largest and oldest friendly societies in the United Kingdom. It, (along with other friendly societies), laid the foundations for the welfare state. The fraternal side of their business provides social activities, care, support and non contractual benefits to circa 70,000 members through a UK-wide network of 154 branches. As well as caring for its own members, they have a tradition of support for both local and national charities. The support for both Branches and members is provided by a central office in Manchester.

Following the transfer, the Oddfellows will have assets of over £400m and a combined membership base of over 200,000 members. Both Boards believe that in joining forces the strengthened capital base will make the businesses stronger and able to take advantage of any future opportunities as they arise

 

24 January 2011

John Reeve appointed new Chairman of AFM

John Reeve, Chief Executive of Family Investments, is the new Chair of AFM, following the announcement last year by Mike Yardley that he is stepping down as CEO of Royal London.

The Association of Financial Mutuals [AFM] today announced that John Reeve, Chief Executive of Family Investments, has been appointed as the its new Chairman. John takes over from Mike Yardley, who announced he is stepping down as Chief Executive of Royal London last year.

John has been Chief Executive of Family Investments, the leading provider of the Child Trust Fund and affordable tax exempt savings plans especially for children, since 1992.

The AFM is a trade body that represents 57 mutual insurers, friendly societies and other financial mutuals in the UK and is tasked with enhancing the importance and value of mutuals within the UK’s financial service sector.

Commenting on John’s appointment, Martin Shaw, Chief Executive of the Association of Financial Mutuals, said "This year is an important one for the mutual industry, particularly for raising the profile of the values of the mutuals sector to the public at large given the many prevalent issues the financial services industry is facing. The mutual sector has proved its strength throughout the recent financial crisis by continuing to innovate and provide value to its customers and we need to keep on doing this through a co-ordinated effort with new and existing members. The AFM is delighted to be welcoming John to the chairman’s role at such a pivotal point in the mutuals’ history and feel he will be the right facilitator to support and assist the Association in 2011 and beyond. We would also like to wish Mike Yardley all the best for the future and thank him for his valuable contribution.”

Commenting on the appointment, John Reeve, incoming Chairman of the Association of Financial Mutuals, said: “Mutuals have proved themselves to be resilient in recent years, and have seen rapid increases in market share between 2008 and 2010, and have been at the forefront of product innovation in the insurance sector.

“My own society, Family Investments, has had to adapt rapidly as a consequence of the termination of the Child Trust Fund and the prospective launch of the Junior ISA later this year. As a sector we have been in extended talks with the FSA about its approach to capital in mutuals and have a lot to do to ensure the mutual sector continues to flourish and adapt to the significant changes in regulation coming up over the next couple of years.”

John was previously Vice-Chairman of the AFM and will be succeeded in this role by Mark Goodale, Chief Executive of Reliance Mutual.

ENDS

 

 

For further information please contact:

Jessica Halls
MHP Communications
Jessica.Halls@mhpc.com
020 3128 8587

Kate Moore
Family Investments
kmoore@family.co.uk
01273 725272

Notes to Editors

The Association of Financial Mutuals (AFM)

The Association of Financial Mutuals is the trade body that represents mutual insurers, friendly societies and other financial mutuals in the UK. The Association of Financial Mutuals (AFM) was formed on 1st January 2010 following the merger of the Association of Mutual Insurers  and the Association of Friendly Societies

The combined association has 57 member organisations from the friendly society and mutual insurance company sectors, who between them manage the savings and protection needs of 20 million policyholders, and have assets under management of £80bn.
A financial mutual is an organisation that supplies financial services products, and which is owned by its customers, or members.  As a result a financial mutual has no shareholders to pay dividends to or account to, and can concentrate on delivering products and services that meet the needs of its customers.

24 January 2011

AFM launches Saving Squad

AFM has launched a new educational website, aimed at helping children aged 7 to 11 learn about money matters; get the full press release.

The Association of Financial Mutuals has today launched (PFEG) quality mark accredited Savings Squad, the second stage of a free and fully interactive online programme aimed at teaching children aged between seven and eleven to be super savers.

Savings Squad allows children to get their hands dirty in 'real life' money spending scenarios such as a virtual town where children can earn points to either save in the virtual bank where they’ll earn interest- or to spend in the ‘Get Stuff!’ shop. It also features tailor-made sections for children, teachers, parents and carers which provides a well rounded approach to learning about money at home, at school and at play.
The teachers’ section includes lesson plans for years 4, 5 and 6 and other downloadable resources that are linked to the National Curriculum.

The website is the second step in an educational programme, following on from the success of the initial programme, Fun to Save,* which was originally aimed at key stage one children.

Both schemes have been accredited with the Quality Mark accreditation from Personal Finance Education Group (PFEG), the government body responsible for helping schools plan and teach financial capability, further emphasising the value of the website as an effective tool for helping children learn about money.

 Martin Shaw, Chief Executive Officer of the Association of Financial Mutuals, comments:

“Saving Squad is not only full of fun learning games and activities for children. It also provides vital resources for both teachers to use in the classroom and for parents at home.  Mutual organisations have a longstanding heritage for helping people to take better control of their finances, and as the leading providers of children's’ saving policies, our members are keen to make learning about savings more accessible to young people."

Personal Finance Education Group (PFEG) Chief Executive, Wendy van den Hende comments:

"PFEG is delighted to endorse Saving Squad through the PFEG Quality Mark accreditation system. We believe that teachers and pupils around the country will benefit from this exciting and highly relevant resource.”  

The website has been developed by the behaviour change specialists, d2 Digital which created the Fund to Save website technology, combining educational resource applications and with behaviour change technologies.

Graham Mallinson, Managing Director of d2 Digital, comments:

“This online resource is about using web based technology to educate young people on the importance of understanding how to manage their money. It provides a comprehensive learning environment that has all of the resources and ideas needed to allow parents and carers, and teachers to be able to reinforce what children learn whilst on the site. These different ways to reinforce the messages set out by the AFM will make the resource more effective than simply having a traditional website for young people to use.”

 

ENDS

For further information please contact:

Jessica Halls
MHP Communications
jessica,halls@mhpc.co.uk or AFM@mhpc.com
Phone: 020 7786 4887 

Notes to Editors
*Fun to Save is a safe place where key stage one children can have lots of fun while they learn about different aspects of money and ways to save. Visit: http://www.funtosave.org/

About The Association of Financial Mutuals (AFM)

The Association of Financial Mutuals is the trade body that represents mutual insurers, friendly societies and other financial mutuals in the UK. The Association of Financial Mutuals (AFM) was formed through the merger of the Association of Mutual Insurers  and the Association of Friendly Societies

The combined association has 57 member organisations from the friendly society and mutual insurance company sectors, who between them manage the savings and protection needs of 20 million customers, and have assets under management of £80bn.
A financial mutual is an organisation that supplies financial services products, and which is owned by its customers, or members.  As a result a financial mutual has no shareholders to pay dividends to or account to, and can concentrate on delivering products and services that meet the needs of its customers.
About d2 Digital
d2 Digital specialises in digital, educational resources that use persuasive technologies to encourage behaviour change in its target audiences and in work for public and not-for-profit sectors
Resources developed by d2 digital include Where’s The Line and Shorething

17 January 2011

Martin Shaw, Chief Executive at the Association of Financial Mutuals provides comment for the Treasury Select Committee on RDR

“While RDR is due for implementation at the end of next year, even if all the proposals had been finalised this would be a very tight timetable for providers, with significant costs and disruption to business.

 Our view is that the FSA needs to better recognise that its role is developing policy is changing, it is completely illogical for FSA to maintain its timeline for the RDR without taking account of changes being imposed by the IMD, PRIPS and MiFID, or indeed of changes being made elsewhere in its own rulebook.  The absence of co-ordination is alarming and we remain concerned that some of our members will find it easier to temporarily close to new business rather than try to implement RDR requirements at the same time as other business critical projects. Is clearer than ever that the RDR is currently destined to fail to achieve its original objectives.   It In order to be successful it firstly needs to reassess its priorities, with more attention given to ensuring that it achieves good outcomes for the generality of consumers, and the implementation deadline must either delayed or phased in over a more appropriate timetable. Secondly, it needs to abandon its “one size fits all” approach to foster the availability of advice through different distribution channels and to accept that different types of advice should be provided.”

RDR needs to abandon one size fits all approach - AFM

Available:Now

Commentator: Martin Shaw, Chief Executive of AFM comments on the Treasury Select Review of RDR and that FSA‘s current approach to RDR will reduce consumer access to advice and cause further red tape.

Input available: The AFM believe that while RDR will result in greater clarity on the cost of advice (versus the cost of products) the majority of consumers, including vulnerable groups, will have less access to independent advice and their needs are likely to be unmet, or they will need to purchase products differently. Most large mutuals conduct much of their business nowadays through independent advisers and we are concerned that the supply chain post-RDR will be constrained by a fall in the availability of advisers, and providers will need to consider other routes to the market to maintain their market ambitions, or else explore different markets. It’s never been clearer that the FSA needs to abandon its “one size fits all” approach- to foster the availability of advice through different distribution channels and to accept that different types of advice should be provided.  A recent and welcome proposal from FSA is to enable certain types of Holloway friendly society products to be exempted from the RDR.  This indicates there is acceptance from FSA that a one size fits all approach doesn’t work and we suggest they consider this more widely.

RDR destined to fail and won’t meet 2012 deadline- AFM

Available:Now

Commentator: Martin Shaw, Chief Executive of AFM comments on the Treasury Select Review of RDR and that FSA‘s current approach to RDR means it will not meet the 2012 deadlines.

Input available: While RDR is due for implementation at the end of next year, even if all the proposals had been finalised this would be a very tight timetable for providers, with significant costs and disruption to business.  The FSA needs to better recognise that its role is developing policy is changing, with the growing powers of the new European regulators, and the determination of the UK government to implement EU Directives with the minimum of variation.  It is completely illogical for FSA to maintain its timeline for the RDR without taking account of changes being imposed by the IMD, PRIPS and MiFID, or indeed of changes being made elsewhere in its own rulebook.  The absence of co-ordination is alarming. We remain concerned that some of our members will find it easier to temporarily close to new business rather than try to implement RDR requirements at the same time as other business critical projects.  We also see some evidence of greater merger activity, and we believe that the combination of providers focusing on new markets, closing and merging will reduce choice and access to financial products.  In my view, the RDR is currently destined to fail to achieve its original objectives.  To be successful, the priorities need to be reassessed, there must be more attention given to ensuring that it achieves good outcomes for the generality of consumers, and the implementation deadline must either delayed or phased in over a more appropriate timetable.

01 January 2011

AFM comments on proposals for a junior ISA

“The mutual sector has always been the natural home of saving for children.  AFM members worked hard to develop the Child Trust Fund market when banks and insurers largely ignored it, and our members have over half of all CTFs.

We have seen significant demand for child savings from parents as a result.  Indeed, recent announcements- in particular about the rising cost of tuition fees- have increased the need for parents to build up a sum for their children.  The Government has indicated it supports an increasing in the level of personal savings, including for children. 

"AFM and its members have been in consultation with Treasury for some time about a potential successor for the Child Trust Fund, and we have provided strategic advice about a range of options.  This includes what is being described as a junior ISA- although we need to be careful that the final solution best meets the needs of parents and their children, without imposing potential tax liabilities and trust writing requirements which an ISA for children might involve.  The recent paper by think tank ResPublica on the ABC account (Asset Building for Children) provides a good platform to work from.”
AFM is the only trade body that supports the Save Child Savings Alliance. 

For more information about the Alliance, go to http://www.savechildsavings.org/

01 December 2010

The future of gender discrimination in insurance

Insurers' use of gender as a factor in assessing risk is under threat from an opinion of Advocate General Juliane Kokott submitted to the European Court in September who believes that this goes against the fundamental principles of equality.

If this opinion is accepted by the European Court of Justice next year, the implications for the UK insurance industry could be far reaching.

The Association of British Insurers (ABI) is already in talks with its lawyers should the opinion be accepted, for fear of the knock on effect that the acceptance of the opinion will have. The FSA in November reiterated its position that it accepts the discrimination based on gender despite the opinion.

The Equality Act

The Equality Act 2010 tightens the UK discriminatory regime by prohibiting conduct that discriminates directly or indirectly against someone with a "protected characteristic". Nine such characteristics are listed: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation.

A service provider (including a provider of financial services) providing a service to the public or a section of the public must not discriminate against a person by not providing, or by terminating, the service, by the terms it imposes or by subjecting the person to any other detriment.

Most provisions of the Act came into force on 1st October 2010 and now form part of the law of England and Wales and (with minor exceptions) Scotland, but (again with a few exceptions) not Northern Ireland.

The Insurance Exception

The Act restates the exception in previous legislation that allows insurers to use gender as a factor in assessing insurance premiums provided that they are proportionate, based on relevant and accurate actuarial and statistical data which is regularly updated and available to the public.

The exemption in the Act derives from Article 5(2) of the Gender Directive that allows countries to "permit proportionate differences in individuals' premiums and benefits where the use of sex is a determining factor in the assessment of risk based on relevant and accurate actuarial and statistical data".

This has been relied upon by insurers to undertake actions like charging men a higher motor insurance premium than women.

The schedule also restates the absolute prohibition on differences in insurance premiums and benefits resulting from costs relating to pregnancy or maternity applying to contracts entered into from 22nd December 2008.

Insurance contacts entered into before 01 October 2010 do not have to be altered in the light of the new Act, only if they are amended or renewed after this date. If they are renewed and they do not comply with the Act then the policy will need to be changed.

The Opinion

AG Kokott made a troubling statement regarding the insurance exemption provided for in the Gender Directive.

She believes that as gender cannot be chosen and is inseparably linked to the insured person, differences that can only be statistically linked to gender should not be used when calculating insurance premiums. She stated that "differences between people, which can be linked merely statistically to their sex, must not lead to different treatment of male and female insured persons when insurance products are developed." Therefore she believes that the derogation in the Gender Directive (and now stated in the Equality Act) should be declared invalid under EU law for not being compatible with the principle of equal treatment.

The only consolation is that she doesn't think the invalidity should apply retrospectively to premiums already agreed and that there should be a three year transitional period before the invalidity declaration takes effect. This would give the market some time to adjust and reassess how they calculate insurance premiums.

Although the view is not binding on the ECJ, should they adopt the view, it will have far reaching implications on the UK insurance market. Previous challenges to this derogation have so far been fought off successfully but the opinion of the AG has got Europe's insurance industry on edge.

The Impact

In real terms if the opinion is accepted it is likely that a female's car insurance premium would increase as an insurer would not be able to take into account that accidents caused by men on average cost a lot more. The payouts for men under life policies would decrease, as insurers could not take into account that women live longer. This would be the same for a widow receiving her husband's life policy. Under the same circumstances, a single woman's payout will increase. Seemingly by creating 'equality', the opinion is simply opening up the floor for a different type of inequality. At least the current 'inequalities' are based on actuarial and statistical data.

The CEA, the European insurance and reinsurance federation is extremely concerned about the knock on effects the adoption of Kokott's opinion will have on the European insurance market. They contemplate that premiums will increase, cover will decrease and some products will be withdrawn from the market altogether. They do not believe that insurers do discriminate, they differentiate and if you treated all insurance customers in the same way, some will be disadvantaged.

Although a decision of the ECJ is binding on all member states, the ABI is talking to its lawyers about what action it could take should the opinion be made binding by the court. The FSA continue to affirm in the light of the opinion that the use of gender as a factor when based on actuarial and statistical data should be taken into account when calculating insurance.

 

Bruno Geiringer, Partner and Helen Skinner, Trainee Solicitor.

pm master col logo

01 July 2010

Fun to save, AFM's website for young children achieves pfeg Quality Mark

Fun to save, the website developed by the Association of Financial Mutuals has been formally accredited by pfeg- the government body responsible for helping schools plan and teach financial capability.

Read more.

The pfeg Quality Mark demonstrates that the website, www.funtosave.org is an effective tool for helping young children learn about money matters.

In confirming that the website had attained its quality mark, pfeg stated:

“This all works very well and is an excellent resource for KS1 children.  It is brightly coloured, the characters and graphics are interesting and engaging.  Children choose a character from a choice of four and then proceed to the games.  As they play the game, they pick up points when they are successful.  They can choose to save these points or spend them on ‘stuff’ like coloured stickers, printable colouring-in sheets, accessories for their characters or desktop wallpaper.” 

The teachers’ website, TopicBox, is equally enthusiastic about the website:

“Your games are perfect for integration into lessons - simple, fun and not remotely annoying, even over time! This is perfect for our users, who hate any kind of nonsense in their lessons it seems...”

Martin Shaw, CEO of the Association of Financial Mutuals stated:

“We are delighted that fun to save has attained the pfeg Quality Mark.  It shows just how useful a resource the website is for helping children learn about money in a fun way.  We are very encouraged with the great feedback and volume of use of the website, and this autumn plan to launch a new website aimed at Key Stage 2 pupils.”

Members of the Association of Financial Mutuals such as Royal Liver and engage Mutual use the website as part of a co-ordinated approach to financial education.

Royal Liver summarise some of their activities:
We have launched our financial capability projects A Bird’s Eye View! and www.funtosave.org to Newport Personal & Social Education and Maths co-ordinators during a training event in January. Working alongside the Welsh Financial Education Unit we presented our resources to over thirty teachers.   The resources have also been rolled out across Liverpool since its launch in 2008; they have now bee introduced to 42 per cent of all the Primary schools in Liverpool and our vision is to have reached at least half of all the Primary schools in Liverpool by the end of the year.

Engage Mutual have used fun to save alongside their Sid the Savings Pig to visit schools across Yorkshire, and have worked with local and national media to promote the value of financial education in schools. Their website provides further information about their support for education. http://www.engagemutual.com/about-us/charities-and-community-initiatives/young-people-and-finance/

01 March 2010

The Mutual Manifesto

AFM was one of the sponsors of  the Mutual Manifesto, which challenged all political parties to show they understand the mutual sector and proposed ways in which the  government can better enable mutuals to compete more equally with shareholder-owned companies and protect the public interest.  It was launched in early 2010, but the recommendations still hold true. Click here to download the Manifesto.