With Profits Market Value Reductions (MVRs)

MVRs may reduce surrender (not death) claims under single premium business. This applies to our ISA, our With-Profit Bond, and our Flexible Savings Plan.

Provided that surrenders continue at normal levels, then the Society will continue to smooth investment returns and, even then, may meet losses of up to 5% before imposing an MVR. If applied, an MVR will act like a negative final bonus, reducing the value of the single premium and all regular or annual bonuses that have been added to it or accrued up to the date of claim.

Following a period of high volatility and nervousness in equity share prices, there was a further large slump in October 2008. At this point, the Society introduced an MVR, but only for business written in 2006, 2007 & 2008. The maximum MVR applied during 2009 was 8%. All MVRs have been removed since 1st October 2009.

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