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Compensation hold-up

Nic Cicutti
Wednesday 31 May 1995 23:02 BST
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BY NIC CICUTTI

Plans to compensate tens of thousands of pension victims could be delayed for months because independent financial advisers cannot handle the workload on time.

A new computer software package is being designed to allow a standard method of assessing claims and paying compensation to victims.

But experts yesterday admitted the new system was unlikely to be in widespread use before the 31 December deadline for compensating the 350,000 clients who are most in need.

Life insurance companies and the software designers are now lobbying the Personal Investment Authority to get the deadline extended. The insurers include NPI, Clerical Medical, Scottish Provident, Norwich Union, Scottish Amicable, Standard Life, Sun Life, Scottish Widows and Scottish Equitable.

Nigel Phillips, director of commercial services at The Exchange, a computer link-up between insurers, threatened to abandon the development of the new package altogether unless an extension is granted.

"We are unlikely to have a system distributed to IFAs until the end of November. They will need at least three to four months to complete the initial work on the review," he said.

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