The Children’s Mutual, a company that is the market leader in child trust funds that the government has decided to kill for new business from 2011, explains why it has stopped writing most new business:
Q. Why have you stopped writing new business for With-Profits life policies?
A. We need to focus on dealing with the recent CTF changes imposed on us by the government. The changes are happening very quickly so we have decided to temporarily suspend everything except CTF Stakeholder business so we can focus on this priority. These changes won’t affect any of our existing customers or their policies.
Q. Is The Children’s Mutual OK?
A. Yes, the announcements we are making are because we need to focus on dealing with the recent Child Trust Fund changes imposed on us by the Government.
Q. What happens to your With-Profits fund now?
A. The fund will remain fully open and we remain committed to the With-Profits market. This is only a temporary measure until our future business strategy has been finalised.
The Children's Mutual has taken what it views as the responsible decision to temporarily suspend accepting new savings business to protect the interests of current members and customers. This is with the exception of stakeholder CTF accounts which it is obliged to accept by government to retain its status as a CTF provider for existing customers. This suspension is temporary in order for the business to re-appraise the new and then post CTF market and to ensure the style and shape of activity it undertakes in a market that is no longer universal makes commercial sense. Members' and customers' interests must come first.
The Children's Mutual believes that to continue to invest in sales and marketing activity for new business acquisition during this re-appraisal process and to accept new customers as members would not comply with its commitment to treat customers fairly.
Life insurance: News update: 6 July 2010