WHAT’S HAPPENING TO LV?

Bain Capital is selling the 178-year old life insurance company to an American private equity firm.

LV bosses agreed to the agreement last year. They claimed they need investment in order expand their business and implement digital technology.

But it has taken several months for LV’s management and Bain to agree terms with City regulators, and figure out how much members will be paid.

The 1.2million members – its customers – are being asked to vote on the deal.

WHY IS THIS A CONCERN

Because LV mutual is owned by customers with life insurance or pension policies,

This makes sure that investors are not made rich by the company.

The Liverpool Victoria was once known previously as Liverpool Victoria. It was started in 1843 in order to provide a dignified burial option for the poor of the city.

Liverpool Victoria, a 178-year-old company, is being sold to Bain Capital, an US private equity firm as members are asked to vote on the deal (photo of company's Bournemouth office)

Liverpool Victoria, a company with a history of 178 years, will be sold to Bain Capital. The deal is subject to the approval of its members (photo taken at company’s Bournemouth headquarters).

Its mutuality was an important principle – members could be sure their money was being put to good use.

Bain and other private equity companies are known for raising prices while cutting jobs. 

MPs and members fear the quality of LV’s business will deteriorate and the cost of policies will rise.

WHO FINDS THE DEAL

Policyholders who are eligible to cast their ballot should receive an information pack by November 18 – they can vote online between now and December 8, or during two online conferences on December 10.

LV members are only people who have life insurance, annuities or pension policies. 

Voting is not available to anyone with a different type LV brand policy such as car or home insurance. This arm of the business was already sold.

Is IT A GOOD RESULT FOR MEMBERS

Bain is planning to pay most members just £100 in return for giving up their ownership of LV – a sum described as ‘paltry’.

Around 340,000 members who hold more ‘with-profits’ policies will get a slightly greater payout.

IS THERE A WAY OUT?

LV’s bosses said they weighed up 12 formal bids and the final two were understood to be Bain and Royal London, another British mutual.

It has been rumoured that Royal London offered £10million more. The bid would have allowed LV to remain part of a mutual and put members first.

Bosses Mark Hartigan and Alan Cook (pictured above) plan to stay on if the deal goes through ¿ other offers would have seen them lose their jobs

Bosses Mark Hartigan and Alan Cook (pictured above) plan to stay on if the deal goes through ¿ other offers would have seen them lose their jobs

LV’s board, led by chairman Alan Cook and chief executive Mark Hartigan, plumped for the Bain deal, claiming it was the ‘only option that offered both an excellent financial outcome for members and gave unrivalled support for the LV brand, our people and UK based locations’ 

LV’s own with-profits committee, which represents members, is understood to have initially favoured Royal London.

The rival mutual is understood to be waiting in case Bain’s deal collapses.

WHO PICKED BAIN?

LV’s board, led by chairman Alan Cook and chief executive Mark Hartigan, plumped for the Bain deal, claiming it was the ‘only option that offered both an excellent financial outcome for members and gave unrivalled support for the LV brand, our people and UK based locations’.

Bain’s offer is likely to see Mr Hartigan keep his role and it is understood he would be awarded a higher salary and an ownership stake potentially worth millions.

Mr Cook will also retain his £205,000-a-year post. They would have both been lost under Royal London.

HOW WILL THIS AFFECT ME AND MY POLICY

All LV-branded insurance such as car or home insurance will be protected as the arm was already sold to Allianz.

But those with life insurance and other similar policies will be affected – they will no longer own the business.

Bain has promised that the so-called mutual bonus which with-profits members are paid in years when the business does well will be maintained ‘at current levels’.

This means that LV members may be left behind if the performance improves. Bain is looking for profits and future customers could be most at-risk.