LV= has been accused by an all-party parliamentary group (APPG) of not properly consulting members over the life insurer’s sale to private equity firm Bain Capital.
In December the group announced its sale to Bain Capital in a £53m deal which also meant it would no longer have the status of a mutual owned by its member customers.
But representatives on the APPG, which includes MPs and Lords, have accused the group and its acquirer in their report published yesterday, of not being transparent about their intentions for the group.
In the report APPG also said the fact that the board moved ahead to conclude a deal with Bain Capital in advance of providing any meaningful information to its membership showed a “disregard for the interest of members” and a “cavalier attitude” towards the member governance of the business.
In a statement LV= claimed it had always been clear to members that the strategic review and subsequent proposed transaction with Bain Capital had been solely driven by their long-term interests.
“At all times this has been the absolute driving force and guiding principle behind any decision made or action taken at LV=. We therefore welcomed the opportunity to provide written and oral evidence to the APPG hearing to explain why Bain Capital was singular in offering an excellent financial outcome for members as well as an unrivalled and long-term commitment to LV=’s future prospects, business and people.
“We are disappointed by the report and we have always recognised the importance of equipping our 1.25m members with all of the information they need to help them make an informed decision in advance of the vote and this continues to remain our absolute priority. As part of this, we are finalising the comprehensive member pack with the regulator – which will include reports from an Independent Expert and With-profits actuary – and look forward to sharing it with our membership in due course. We will also provide all members with another opportunity to pose any further questions through a webinar.”
The group added that it has been clear that while the group remains well capitalised, it requires significant further investment to compete in an increasingly competitive market.
“This investment would need to come from our existing capital, and this creates an inherent tension between balancing the requirement to invest for the future success of the business while providing meaningful returns to With-profits policyholders.
“We continue to passionately believe that we have secured the best possible outcome for members and our confidence in the future of LV= under Bain Capital’s ownership remains unswerving.”
