NFU Mutual in trouble ?

[jendan]

If under 55 could you not transfer your pension fund to another provider?

Probably,but i cashed mine out when i was 55.

 

[hally]

If under 55 could you not transfer your pension fund to another provider?

Just spoke to my accountant, will aim to move it immediately to another provider, not really wanting to cash it yet.

 

[LadyTwoFourEight]

Potentially how could this effect NFU pension schemes if they are in real trouble?

This is a question members might well take up at the AGM.

Be careful doing this, though, because the CEO has expelled people who challenge the way the business is being run, and they can then sabotage your participation in the insurance market by doing this.

A company with proper share holders could never be run like that, but "its the mutuality that sets them apart" - not in a good way.

My understanding is some of this is about to be raised in Parliament...

 

[snarling bee]

This is not good for the whole insurance industry surely. If a precident is set in court with the NFUM then it won't just be the Mutual going under. As always the devil will be in the detail.

Why should any insurance Co pay out if it was partially covered by HM Govt. Surely the insurance co. would pay the balance. The Govt payouts were as unforeseen as the pandemic. There's enough fraud going on in all the Govt handouts without insurance filling the pockets of those that have over claimed already.

As for saying it is unethical in parliament.....since when have MPs been ethical in what they say or do? MPs can say what they like, it doesn't mean it is correct, morally, ethically or otherwise.

 

[Chris F]

One of the issues was relating to farms that runs weddings and not being covered. Which the head of the NFU used to do. I note that that part of the business was shut down. Surely if NFUM refused Minette's policy and shut down her business then at least they are being consistent with this policy.

As our resident NFUM supporter @NLF states, they will have re-insurance. So even if they lose the case, I doubt it will damage the overall business fatally.

Will be following with interest though and from a few of the stories I have heard, some farms have really suffered. So if they do get some money back then great.

 

[LadyTwoFourEight]

This is not good for the whole insurance industry surely. If a precident is set in court with the NFUM then it won't just be the Mutual going under. As always the devil will be in the detail.

Why should any insurance Co pay out if it was partially covered by HM Govt. Surely the insurance co. would pay the balance. The Govt payouts were as unforeseen as the pandemic. There's enough fraud going on in all the Govt handouts without insurance filling the pockets of those that have over claimed already.

As for saying it is unethical in parliament.....since when have MPs been ethical in what they say or do? MPs can say what they like, it doesn't mean it is correct, morally, ethically or otherwise.

The maximum of the law is Pacta sunt servanda, "agreements must be kept". Just like you, presumably, the NFU MUTUAL presumably want the benifit of contracts (like >£20k a year in premium income they gladly took *to provide a service*... ) and that comes with a duty to honour obligations which they freely entered into of course. Like this one.

This is not complex morally or legally.

This is just a fundamental principle of law, so ancient indeed, that it has Latin name.

The criticism in Parliament was well made, even if, for whatever reason you don't like all MPs in all circumstances, (which is a slightly unhealthy working assumption - maybe read the proceedings to understand what was being said (link is available above)) . This criticism was repeated in the press, in fact, with a "worst" customer service award from The Observer in 2020. So it wasn't confined just to Parliament.

The point is tax payers (like me by the way) did not pass grant money to businesses to protect the performance of the NFU MUTUAL and thereby prevent the director's bonuses, performance and remuneration from impact. That was emergency support for all businesses, not a thing to be used to sanction a prudent businesses for *buying* by switching it off to protect the numbers of an insurance company. Think about the real world way your analysis would actually operate if adopted by the courts or as public policy...

If you object to this case being brought at all, maybe just insist on better management of the NFU MUTUAL... and an inquiry onto why it was so badly run this situation exists at all.

Because it should not, really.

You can got to the AGM and ask for better management and performance. Quite eye-watering remuneration is happening so the management should be, you know, good. You should get involved at the AGM, if you own it as an member/policy holder.

Caution though - - Don’t inquire to hard of the quality of management at the mutual though - you will be expelled, and punished by having your files marked declined.

What a terrible culture, lacking in basic competence and vindictive in the face of accountability.

 

[snarling bee]

Calm down.
I have no affliation one way or another with the NFUM. I have not insured with them for years.
If any insurance Co had an obligation to pay then they should do so.
MY points were:
Just because something was said in parliament does not make it 'gospel'. Edit: If it was repeated in the press then that is no endorsement in my eyes. Do you believe everything you read?
Is the whole insurance industry deep dodo due to Covid? In which case we will all be paying more.
If an insured business has a £100,000 loss due to Covid but the Govt has given them £20,000 then surely the insurance Co should pay £80k not £100k.


I have no comment on the pay of the executives, but any business has to pay the going rate for talent, or it gets monkeys. (Farm employees are no different, the fact that they may earn more than the farmers they work for is irrelevent. I digress.)

 

[NLF]

Following up, here are materials from the lawyers, Penningtons, themselves:

Link: https://www.penningtonslaw.com/expertise/commercial-dispute-resolution/group-action-litigation-and-professional-negligence/business-interruption-claims

Full account from above link:

====starts===

The coronavirus pandemic and lockdown measures have resulted in significant numbers of UK businesses having temporarily to close down or drastically reduce their operations. This has caused considerable loss of income and other damage – and will continue to do so as long as the virus persists and new and varied restrictions are introduced in response.

We represent businesses that are claiming under their business interruption (BI) insurance policies for losses arising from the coronavirus pandemic. Many businesses across the country are finding that their insurers are either failing to confirm that losses are covered under their BI policy or have declined cover completely (and in some cases are stalling or even failing to respond to enquiries).

A test case against insurers brought in the High Court by the regulator, the Financial Conduct Authority (FCA), with the intention of resolving some key contractual uncertainties and ‘causation’ issues, has led to the court making declarations on the application and interpretation of sample wordings. That decision was appealed to the Supreme Court which handed down its landmark ruling in favour of policyholders on 15 January 2021. The judgment will now be distilled into a new set of declarations.

Although the judgment is largely welcome news for policyholders, it has the following limitations:

• only 12 sample wordings issued by six insurers were held to provide cover (out of 21 sample wordings issued by eight insurers tested in the original High Court case). As more than 60 insurers have provided BI insurance policies to UK businesses under an estimated 700 types of business interruption insurance, there will be significant variations to the samples across these policies;
• where there is not an exact match for tested wording, it is highly likely that insurers will contest cover, making legal distinctions with which most businesses are not equipped to argue without taking legal advice;
• the test case was never intended to encompass all possible disputes and does not determine individual claims;
• the test case only deals with non-damage wordings (ie those not requiring physical damage) and only attempts to resolve limited questions relating to extensions of coverage for ‘disease’ and ‘denial of access’ as well as the effect of the ‘trends clause’ on quantum as a result of causation.

At Penningtons Manches Cooper, we are currently helping our clients to organise group action litigation claims. These clients are typically businesses and organisations within the education, arts, hospitality, retail and leisure, real estate, social housing, life sciences and motorsports sectors.

We are organising claims so as to meet the limitations of the test case and pursue those cases that would otherwise fall through the cracks.

It is intended that the group actions will be fully funded in order to avoid any upfront costs to our clients and will be led by our specialist business interruption insurance and group action lawyers, drawing on our extensive expertise within these business sectors.

To express your interest in joining the groups, please click here. Those with larger claims who are interested in being represented individually and outside the groups can contact us separately at [email protected]

==ends==

That is fair comment up to a point, but my understanding is that the FCA chose those 21 policies from eight insurance companies quite carefully, because they were representative of the issues in the broader market. Hence my skepticism.

But Penningtons are quite legitimate, so they wouldn't take the case or find a litigation funder if there was no chance of a win. If the case is really being fought on a no win no fee basis there's no reason for anyone with a claim not to have a go.

 

[glasshouse]

So are lloyds names going to be selling their estates soon?

 

[NLF]

One of the issues was relating to farms that runs weddings and not being covered. Which the head of the NFU used to do. I note that that part of the business was shut down. Surely if NFUM refused Minette's policy and shut down her business then at least they are being consistent with this policy.

As our resident NFUM supporter @NLF states, they will have re-insurance. So even if they lose the case, I doubt it will damage the overall business fatally.

Will be following with interest though and from a few of the stories I have heard, some farms have really suffered. So if they do get some money back then great.

I'm not NFUM's resident supporter. But when I see something that is blatant nonsense (usually offered up by your boss or Nigel Wellings / Acres Insurance) I try to give an alternative view supported by hard numbers.

There's a good example in the prior few posts where one poster says that they will move their pension because another poster says that NFUM will be bust if they lose this legal case. That's just plain bonkers. We know nothing about the poster's pension (is it unit linked, with profits etc) and so far this legal case isn't even a legal case, its just a mid tier law firm creating publicity to see if they can recruit sufficient punters to raise the funds to take the case to court. But despite that, the poster will shell out fees to his / her financial advisor or accountant to move the pension.

 

[hally]

I'm not NFUM's resident supporter. But when I see something that is blatant nonsense (usually offered up by your boss or Nigel Wellings / Acres Insurance) I try to give an alternative view supported by hard numbers.

There's a good example in the prior few posts where one poster says that they will move their pension because another poster says that NFUM will be bust if they lose this legal case. That's just plain bonkers. We know nothing about the poster's pension (is it unit linked, with profits etc) and so far this legal case isn't even a legal case, its just a mid tier law firm creating publicity to see if they can recruit sufficient punters to raise the funds to take the case to court. But despite that, the poster will shell out fees to his / her financial advisor or accountant to move the pension.

You are assuming that anybody looking to move their pension would do this purely on a rumour picked up from social media. This is not necessarily the case but any such information about an investment warrants some level of investigation whereby a decision will be made to either sit tight or make a move and pay any fees associated with such a move.
In my case a basic bit of digging on the internet has shown director renumeration to be far in excess of what should have been due bearing in mind the performance of the mutual recently and the performance of my particular fund compared to other similar investments held within our family.

 

[idgni]

Can you explain this as I don't understand your sentence at all?

Wimbledon 2020 i assume

 

[Chris F]

I'm not NFUM's resident supporter. But when I see something that is blatant nonsense (usually offered up by your boss or Nigel Wellings / Acres Insurance) I try to give an alternative view supported by hard numbers.

There's a good example in the prior few posts where one poster says that they will move their pension because another poster says that NFUM will be bust if they lose this legal case. That's just plain bonkers. We know nothing about the poster's pension (is it unit linked, with profits etc) and so far this legal case isn't even a legal case, its just a mid tier law firm creating publicity to see if they can recruit sufficient punters to raise the funds to take the case to court. But despite that, the poster will shell out fees to his / her financial advisor or accountant to move the pension.

Pretty sure I was agreeing with you. Whilst this might be a financially painful and possibly embarrassing situation for them, it won't be the end of the mutual.

I'll let @Lucy @ Farm Marketplace know you don't think much of her posts

 

[Flatland guy]

Calm down.
I have no affliation one way or another with the NFUM. I have not insured with them for years.
If any insurance Co had an obligation to pay then they should do so.
MY points were:
Just because something was said in parliament does not make it 'gospel'. Edit: If it was repeated in the press then that is no endorsement in my eyes. Do you believe everything you read?
Is the whole insurance industry deep dodo due to Covid? In which case we will all be paying more.
If an insured business has a £100,000 loss due to Covid but the Govt has given them £20,000 then surely the insurance Co should pay £80k not £100k.


I have no comment on the pay of the executives, but any business has to pay the going rate for talent, or it gets monkeys. (Farm employees are no different, the fact that they may earn more than the farmers they work for is irrelevent. I digress.)

My understanding was if the insured amount was for £100,000 that is the amount, if I insured a vehicle for £10,000 and it was in an incident and wrote off I would expect the insured amount to be £10,000 to be reimbursed subject to usual checks.. Did the Government give much money to businesses free?, I understand some got exception on business rates and the staff of the businesses got furlough, but I thought a lot of businesses got offered preferential loans and unless the business folds/in liquidation only then does HM Government take on the loan.

 

[Charlemagnex2]

If so then there's no claim, surely?

Unless they were led to believe otherwise.

It is probably worth clarifying that as of the beginning of 2023 Misselling of insurance in this context was established.*

Each policy holder is entitled to a up to £15,000 (it is unclear how many policyholders were impacted but it is likely to be thousands) -- another point will be consequential losses, interest and any stress or whatever

*source: https://www.postonline.co.uk/claims...-to-claim-after-covid-cover-complaints-upheld

 

[Hilly]

So are lloyds names going to be selling their estates soon?

Please you that eh .

 

[Charlemagnex2]

Speaking here as someone woth some knowledge of this action... The NFU Mutual sold various business interruption policies. One of them covered for closure of businesses due to an order by a public office holder.

The NFU MUTUAL said that the pandemic wasn't an incident so they didn't have to pay. They got a little support for thks analysis from the FCA test case, in the High Court, but the reasoning used by that lower court to get there was rejected in the UK Supreme Court.

The extent of cover was £50,000 per policy. They sold, I understand, 9,000 policies of this type.

*This means the mutual may owe nearly half a billion pounds because of this*.

Did the directors mention this in the 2020 or 2021 accounts? No!!! This is a staggering thing to not be open about.

This, put with losses of £290m in one year and £141m is a slightly shocking comment on the commercial competence of the senior management. Who paid themselves, in one case £6M total remuneration recently.

Not altogether a happy situation!

It is probaly worth while noting that the accounts for 2021 ended up show in loss of £1.05 billion pounds -- it is not clear if the misselling (just refered to with citation above) is included in that.

The litigation around the breach of contract continues slowly but there is a case or two decided on these lines which is unhelpful to NFU Mutual.

One being September 2021, an arbitration in The Policyholders Specified in Schedule 1 to the Arbitration Agreement v China Taiping Insurance (UK) Co Ltd took place with Lord Mance as arbitrator. This has been approved of several times at High Court level and sets out why the first instance decision is unsound following the judgement in the UK Supreme Court of the test case on appeal.

 

[Charlemagnex2]

Watching with interest, our boarding kennels are insured with nfu. tried to claim but were told no.

You ought to be aware that Misselling was proved and has recently bee accepted. (Source: https://www.postonline.co.uk/claims...-to-claim-after-covid-cover-complaints-upheld)

Have they proactively contacted you about this, or have they been hiding from you about it.

They should have provocatively contacted you. If they are acting honourably an fully occupying their duties.

That being said: this has been established since February 2023 and I am aware of people having to instigate wuestions to get paid and months being taken to get back.

 

[Charlemagnex2]

Pretty sure I was agreeing with you. Whilst this might be a financially painful and possibly embarrassing situation for them, it won't be the end of the mutual.

I'll let @Lucy @ Farm Marketplace know you don't think much of her posts

Thy just lost £1.05bn and these matters of contended breach of contract and established Misselling are still not settled.

 

[Charlemagnex2]

Hmm... I'm not sure if all this is correct.

The FCA took about a dozen policies from 8 companies to the High Court. NFU Mutual was not included. On balance the insurers won about 2/3rds of the points. The FCA successfully appealed a handful of points at the Supreme court. My understanding is that the FCA test case found that pandemic wasn't an "incident" in relation to general BI policies. This point was not appealed to the Supreme court.

Some of the disputed policies were incredibly poorly worded (most notably Hiscox's) hence the need for the test case. NFUM appears to have some of the tighter policies e.g. disease cover was not standard in their BI policies, where it was provided it was based on a list of inclusions (rather than exclusions).

As for NFU's liability, your maths is correct, but I imagine that NFUM, like any other insurer will carry reinsurance which would substantially offset any large loss. Their 2020 annual report is full of risk language re covid. I'm not sure how you know the 2021 accounts don't mention covid? I don't think they have been published yet (please correct me if I am wrong). The highest paid director made 2.3m in 2020, so not sure where you got the 6m figure from.

This was all overturned in the causation analysis adopted by the UK Supreme Court. The litigation continues and Misseling was accepted in 2023 by NFU Mutual.