We have recently written to all Riley bondholders to advise changes to Riley's Terms and Conditions.
Riley's Terms and Conditions are being changed with effect from 20 October 2011. These changes will alter the options available to bondholders.
What are the changes?
The changes which will take effect from 20 October 2011 are:
- The option to select a new insured date will be removed
- The option to select a new protected amount will be removed
- The profit review level option will be removed
Additionally, the following temporary changes will be made permanent with effect from 20 October 2011:
- The option to make additional investments
- The option to increase your protected amount
- The option to bring forward the insured date
Why have we made these changes?
Protection is a key element of Riley. The cost of protection increased significantly during the extreme stockmarket volatility in the latter half of 2008 and as a result we temporarily withdrew Riley from the market. We have continued to monitor the cost of protection since 2008, but as it has not returned to levels that we feel are reasonable we are removing all protection-related options from the contract.
A principal consideration is to ensure we treat customers fairly. While the cost of protection remains a fair market price, it is at a level that makes the suitability of an investment in Riley, relative to a deposit investment, hard to justify. The cost of protection is far higher than ever anticipated and any new protection, or changes to existing protection, would require a significantly greater proportion of the bond's investment to cover the protection element.
What does this mean for Riley bondholders?
The changes will restrict the options available to bondholders but they will not impact the current value of the bond or the bond's existing protected amount. Existing bonds will continue with their selected level of protection but no new additions or changes to protection are available.
The following options are still available to existing Riley bondholders:
- Regular withdrawals can continue to be made/new withdrawals can be set up
- Bonds can be cashed in earlier than the insured date – partially or in full
- Death benefits still apply
For more information please call our customer helpline on 0845 602 5045 from 8am to 6pm, Monday to Friday, or get in touch with your usual Scottish Life contact.
The amendment to Riley's terms and conditions are shown below:
Riley Bond - Changes to your terms and conditions effective from 20 October 2011
As a result of a review of the benefits available from your bond, a number of changes will be made in accordance with the bond's existing amendment power. These changes will have effect from 20 October 2011. The changes are shown below. You should keep a copy of this sheet and read it together with your Terms and Conditions. Any other documentation that we may have issued in relation to your Riley Bond, such as your Key Features Documentation, should also be read taking account of these changes to the Terms and Conditions.
7.5 Profit review level
This condition is deleted. It has not been replaced.
7.6 At the insured date
This condition is deleted and replaced with the following wording:
"Your bond is a whole of life bond and will not automatically come to an end on the insured date.
We will write to you at least 30 days before the insured date to ask for your instructions on what should happen before or at the insured date. We will give you the option to cash-in your bond in full in accordance with condition 13.
If we do not receive your instructions in writing by that date we will automatically cancel all of the units allocated to your bond and use the proceeds to allocate units in the deposit fund. If that fund is not available at the time we will choose another similar fund. There will be no charge for this switch. We will cancel and allocate units using the unit prices calculated on or next after the insured date.
The fund protected amounts will then become zero and no insured date will apply to your bond".
Dated 19 August 2011