Policyholders Sue Mis-selling Of Unit-linked Product

A group of UK and international investors have launched a multi-million-pound claim against life insurers Quilter International and Friends Provident International. The claim, which has secured litigation funding, centers around what the group alleges was the mis-selling of “high-risk funds” through insurance wrappers to “unsophisticated British and international investors living overseas”. The group said that many of the expats are now retired and have lost their life savings.

The products were described as life assurance policies, but the group said they were “unit-linked” and featured high risk funds which were “entirely inappropriate for unsophisticated investors”. The insurers “sidestepped British investment regulations” by selling over £100m  worth of these products via the Isle of Man. Both life insurance companies deny any wrongdoing.

Financial Difficulty - Old Mutual International, as Quilter International was then known, and FPI received several warnings prior to the funds collapsing, and “appropriate due diligence would have revealed the potential issues with the funds”.

The funds were linked to the collapse of LM Investment Management, which saw investors lose millions invested in funds including the LM Managed Performance Fund, Axiom Legal Financing Fund and the Premier New Earth Recycling Facilities Fund. Victims of LMIM have struggled for years to recoup some of their losses.

Response - A Quilter International claimed - “We sympathize with these customers, however Quilter International is the provider of the life assurance policy and does not provide advice in respect of any underlying investments, as that is the responsibility of the customer’s investment adviser." 

This sentiment was echoed in a statement from Friends Provident International (FPIL) - “FPIL is exclusively a provider of insurance products and does not provide investment advice. FPIL’s portfolio bond is a flexible and tax-efficient international policy through which a policyholder can invest in a range of asset classes of their choice. All investments are selected by the policyholder themselves, often with the assistance of an independent financial adviser chosen and appointed by the policyholder to provide personalized advice."