Occidental And Regal Holders Stay Put
The Age
Sunday May 23, 1993
THE MAJORITY of the 70,000 Occidental and Regal policyholders who were transferred to Mercantile Mutual as a result of a court order earlier this year look set to stay put.
While letters to `The Age' and to Occidental's judicial manager, Mr Richard Grellman, indicate that many policyholders remain concerned and confused about the value of their policies under the transfer arrangement, Mercantile figures show that only 4500 policyholders have so far requested a redemption, which would release their funds on 1 June.
Mercantile's deputy general manager and actuary, Mr David Waples, said Mercantile was pleased with the relatively small number of redemption requests.
While this figure could be expected to rise with the lifting of the court-imposed Occidental and Regal fund freeze at the end of this month, Mercantile was confident that most of the 70,000 policyholders would opt to remain with the company.
The court order, transferring the remaining business of the beleaguered Occidental and Regal life companies to Mercantile Mutual on 23 April, signalled the end to the long-running legal battle over the distribution of policyholders' funds.
Occidental and Regal policyholders have been waiting to receive a payout since 1990, when they were first placed in judicial management after Occidental and Regal's botched sale to a convicted confidence man, Phillip Carver.
Under the transfer arrangement, many of the Occidental and Regal policyholders have had to accept the cash ``surrender" value of their policies, as opposed to the more often quoted, and generally much higher, ``current accumulation" value.
Mr Grellman said he had been sent many letters from policyholders who were concerned about ``the basis and reasonableness" of the transfer charge under the arrangement.
In a letter to policyholders, Mr Grellman said these charges were unavoidable, as they included establishment as well as agent fees and commissions.
Normally, these costs create a ``debt" under the policy that is paid off over the life of policy. Howver, in the case of the Occidental and Regal policies, it was decided that the debt should be repaid at the time of their transfer to Mercantile.
Mr Grellman said policyholders should bear in mind that the court had agreed to the Mercantile transfer on the basis that it would provide policyholders with a ``proper and good" result.
He said the transfer value provided was in most cases no less than the immediate cash surrender value that would have been available under the existing policy for any policyholder.
Occidental and Regal policyholders who have queries about the value of their policies under the Mercantile transfer arrangement can ring the Mercantile hotline on (008)817159.
© 1993 The Age
Share This