Fund Update - Global Strategic Balanced broker fund

Further to our previous communication, policyholders invested in the suspended Global Strategic Balanced broker fund have now had the 20.15% liquid payment, that we received from the underlying Strategic Growth fund, applied to their policies. This was carried out by way of unit allocation to the SPI Balanced Managed S1 fund instead of the suspended broker fund, the reference to which has now been removed from policies. 

This action was taken to allow policyholders full access to the liquid payment and re-activate their policy. 

Once the payment was applied and outstanding policy charges were deducted, policyholders fell under one of the following: 

• Those whose policy value was above our permitted policy minimum* as at 13 December 2013. These policies remain active on our system. Policyholders can take the option of surrendering their policy, free of any surrender penalties, until the end of March 2014. Alternatively they can exercise any other servicing options under their policy including valuations, fund switches, part withdrawals and regular withdrawals.
• Those whose policy value was below our permitted policy minimum* as at 13 December 2013. In line with their policy Terms and Conditions, these policies have been automatically surrendered without the deduction of any surrender penalties, and the proceeds are waiting to be paid out.
• Those who had no value left in their policy as at 13 December 2013. These policies have lapsed without value.

* Policy minimums: GBP2,500 / USD4,000 / EUR4,000 / HKD30,000 / JPY425,000. 

Letters were issued to policyholders, with copies sent to their servicing agents. The content of the letters depended on which of the above scenarios the policy fell into. 

What is the probability of further recoveries from the underlying suspended fund? 

We are reliant on receiving updates from the Directors of the underlying fund – the Strategic Growth fund – and to date we do not have any further information from them on what the likelihood of further recoveries may be, albeit that they are not imminent. 

Future payments from the suspended Global Strategic Balanced broker fund Should the underlying fund of the Global Strategic Balanced broker fund – the Strategic Growth fund – realise any further liquid payments, we will pay out those distributions to both active policies and those that have surrendered or have been automatically surrendered. For active policies these will be applied by way of unit allocation to the SPI USD Balanced Managed S1 fund and for surrendered policies by way of cheque to the policyholder's last known address. It is therefore vitally important that policyholder's continue to inform us should they change their correspondence address to ensure we are able to communicate with them on this matter. 

We will continue to keep policyholder's informed, as and when we receive any relevant updates from the Directors of the Strategic Growth fund, writing to them at their last known address.