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Standard Life fights off insurers' appeal over £100m Sterling payout
by Daniel Grote on Dec 18, 2012 at 11:09
Standard Life has successfully fought an appeal by professional indemnity insurers against a court ruling they should cover the life company's £100 million payout to Sterling fund investors.
Standard won a court battle against 11 professional indemnity insurers in February, arguing their policies should have covered the losses it incurred on asset-backed securities held by its Sterling fund.
The insurers appeal the decision, but the appeal has been dismissed, with Standard Life awarded its costs related to the appeal. The insurers now have 28 days to decide whether to appeal to the Supreme Court. If an appeal is granted, Standard said it was unlikely the case would be heard before autumn 2013.
The fund lost 5% of its value in early 2009 due to its holdings in asset-backed securities, despite being marketed as a 'cash' fund. The losses sparked outrage among advisers and investors, who said marketing material had been misleading.
Standard bowed to pressure by injecting cash into the fund, and last year was fined £2.45 million by the Financial Services Authority, which said it had misled investors.
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