Getting to the bottom of inherited estates: what should the politicians be asking?

Just when Hector Sants had managed almost 24 hours without being blasted for the FSA’s behaviour, we now learn that he is being tossed over the coals once again, this time over efforts by insurers to reattribution of the inherited estates of their with-profits funds.

Unhappy Norwich Union policyholders and their financial advisers are now looking to the Treasury Committee to get them some answers, after their own letters, complaints and pleas for answers fell on death ears.

As well as Sants, the chief executives of Norwich Union and Prudential are also set to face the committee, which among other things is looking for a definition of the funds, and considering whether allowing life assurance companies to use inherited estate to subsidise corporate activity has any adverse effects on competition.

The committee, which is chaired by John McFall, will look at the role of the policyholder advocate in such negotiations. It will also delve into the FSA’s role in regulating these estates.

I imagine that Nick Prettejohn, chief executive of Prudential, will be listening very closely in order to make sure the Pru doesn’t fall into the same traps that NU has done; negotiations have been delayed by months and many policyholders have been left confused about whether they are actually in line for windfalls. There is an obvious need for greater clarity for policyholders. But what other lessons should the Pru learn from NU's attempts? Is the whole process open enough? 

What would you be asking Sants and co if you were sitting alongside McFall?