EQUITABLE LIFE MEMBERS

Clarity and Parity - Page 2

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The fall of Royalty Life continued

Mike      Just joking honey. Mind you what would you do if I died and the house went to my brother?

Christina Well, after running naked through Richmond with my bra on my head singing hallelujah that you were dead, I would kill him. Or perhaps shag him again.

Mike      (Nervously laughing) Ok, sorry John. I think that will be it on the questions. What now?

Briggs    Well, I’ve filled in most of the forms. I am assuming the pension contributions will be into our fabulous With Profits fund. Tell me if I am wrong…No…Good. The life cover requires some work from you. I have filled in the forms but because of the level of existing cover that you both have, I will need you to complete Medical History Statements. Best I let you do this rather than ask the questions and fill the forms for you. You know, there’s a few sensitive ish questions. All the info is kept strictly confidential. We are very careful at Royalty Life.

Mike      (Shifting nervously) Oh. Erm, will we need to have medicals?

Briggs    Not very likely. We may write to your GP though. All done efficiently and with no cost to you.

          Silence as both start scribbling answers. Mike lingers over a question but Christina ploughs on and finishes quickly.

Christina Come on Mike, we are delaying the young man.

Mike      I’ll be two more minutes. (phone rings) Get that would you otter chops?

          Christina leaves.

Mike      John. Look. Bit tricky this. Help me would you? I have answered question fifteen as “No”. You know the one I mean…you know? The clap doctor stuff. Thing is, the answer should be yes. Chris will check mine so I can’t put “Yes”. Do you get my drift?

Briggs    Mike, non-disclosure could make your policy invalid. You must be honest. Or at least if you are going to fib, for Christ’s sake do not tell me. I can’t know.

Mike      No, no, no…I will tell the truth. I need your help though. Give me a spare blank form and I will send you it in the post. I will answer question 15 “Yes” and give the full details. I just can’t now.

Briggs    This is very odd.

Mike      Not as odd as the South American temp in accounts that I found myself under during the company summer ball! Came out like chicken pocks on the old hampton. All clear now though. She’d go ape if she knew.

Briggs    I see.

          Christina returns.

Christina What are you whispering about?

Mike      Smoking.

Christina You’ve given up. Don’t tell me you’ve started again.

Mike      No. Not at all. I was just getting John to explain what the definition of a smoker is. Turns out if you have a single cigarette in any 12 months, you are classed as a smoker and have to pay more. That means the one you had behind the vestry at Calum’s wedding  makes YOU a smoker, not me.

Briggs puts his fingers in his ears. Christina jumps up and runs to get the phone which rings again. Briggs slips a new medical form into Mike’s hand and he pops it down the side of the sofa. Mike finishes and Christina checks it. Paperwork completed Briggs stands and thanks both for their hospitality before leaving. 

Same day, 12.30 am

Scene - Briggs is in his sporty German coupe. The Skids, “Working for the Yankee Dollar” blares out. A CD multichanger glows red against a sporty metallic dash. The song cuts out and is replaced by the familiar tone of The William Tell Overture. It is his phone.

Briggs    Got to change that tone. Very last year. Hello, John Briggs, Royalty Life?

Christina John. It’s Christina Plumfield. You were here this morning?

Briggs    Yes. Hi Christina. How are you?

Christina Fine. Well not fine. Thing is…..This is really awkward. Look…sorry to mess….Shit, sorry, rambling. Problem is …you know…that form I filled in earlier. The health questionnaire. I may have filled in one of the questions wrong. Well, not may have. (pauses) Did. Question 15. Do you know the one?

Briggs    Yes. Please don’t be embarrassed. I hardly ever even glance at the forms. None of my business. Anything you write is really between you and the underwriter.

Christina I lied. It should be “Yes”. Couldn’t do that in front of Mike. He doesn’t know. You know.

Briggs    Christina this is a bit unusual…..

Christina So was my brief tryst with our gardener. He’s from Malta. We did some very unusual planting last summer, especially one night when Mike was at a company ball. Honestly meant nothing other than a change to the once a month Sunday afternoon “cosy-up”, as Mike calls it. You know how I know he’s in the mood? He winks. Christ.(There is a long pause. She sighs deeply) Anyway. I lied on your form, but it was only ever going to be temporary. What can I do?

Briggs    I will be in the office in ten minutes. Would you like me to put you one in tonight’s post? I will destroy the original for you.

Christina Oh thanks awfully. Be a few tricky questions asked if he ever knew. Thanks.

Briggs    Quite. Terrible for these things to get out.

          Same day, 1.35 pm.

Scene – Impressive building in Eton High Street. “Royalty Life” and a big blue eagle are above the door. It is the Eton branch. In the staff kitchen area Briggs sits opposite another ridiculous pinstriper.

Briggs    So, all in all, it has been a bit of an odd day really. They have obviously both been a bit naughty and as a result both had some variant of galloping knob-rot. You’d never guess it if you met them. Just don’t look the type. Mind you, what is the type? Who knows? But then again, who cares? Anyway, very odd day indeed.

          They are interrupted by one of the sales assistants, Sharon

Sharon    John, there you are. I’ve got some bloke called Irwin on the line. Hopping mad he is. He says he’s been tipped off by someone called Carliss and he knows what we are up to. He keeps going on about guaranteed annuity rates. Won’t be fobbed off.

Briggs    Serial moaner. He’s retiring next month and I am sorting out the annuity for him. Honestly, this is an exclusive club at Royalty Life. How do some of these annoying bloody boat-rockers get in? Sharon, I’ve no idea what a guaranteed annuity rate is. It probably doesn’t exist. Put him through to my desk.            

          At Briggs’s desk. Telephone converstaion. Split screen. On one side, a short, stocky grey haired man stands by a desk. He is red faced.

Briggs    I am almost offended that you can say that Mr Irwin. I have worked tirelessly in getting things ready for you to retire next month. Why on earth would I try to steal from you?

Mr Irwin  Carliss says he’s on to you lot. He’s right. If you guarantee a level of income you should pay it.

Briggs    But Mr Irwin, I have explained that the computer produces the only rates we have on offer. For your £200,000 fund, the income, assuming no tax-free cash would be £14,200. This is the highest you can get. I have no idea where you have got the figure of £20,670 from.

Mr Irwin  The policy document. Even the original quotation mentions a guaranteed income.

Briggs    Look. I will have to stop you now. I don’t have a copy of your original policy document. Let me get one and call you back. But Mr Irwin, I promise I would not rip you off, lie to you or hide stuff from you. My job is to give you best advice. I will call you tomorrow when I have more info. Is that ok?

Mr Irwin  Not really, but I have no choice. Carliss said you would try to squirm out of it. Good bye (phone slams).

          Briggs sits and stares at his desk. The workstations are in an open plan office with shoulder-height partitions. Briggs is talking to himself.

Briggs    That was not very pleasant. This was not in my job description. This is a jolly nice company with jolly nice clients who are always very happy and most grateful.

          Same day: 2.15pm

          Scene – Rich Cooper’s office. He is on the phone.

Cooper    Mr Nash, I know you are upset but a decision has been made.

Nash      But one of the young girls I spoke to earlier today said I would get the full amount including my guaranteed rate on the whole fund.

Cooper    That was this morning. This is now. End of story.

Nash      What has happened to the lovely company that looked after me so well all these years? My IFA, Mr Carliss said it was all agreed.

Cooper    Not by me. Sorry.

Nash      But this is not fair. My IFA said.

Cooper    We don’t deal with IFAs Mr Nash.

Nash      (His voice quivering) But everything was going to be so good. I am sixty in a few days. My wife died last month and I…(he starts to cry)

Cooper    Please don’t get too upset Mr Nash. We feel we are being very fair. Not just for you but for all the members.

Nash      (Sobbing and struggling to get the words out) This isn’t fair. If I could sue I would.(He puts the phone down.)

Cooper    Boo fucking hoo. Get over it. I will!  

Same day: 4.15 pm

Scene – Eton Branch. Briggs is pacing up and down the office. He slams himself into his chair, leans back and makes it spin. He stands up so that his head appears above the partition and shouts.  

Briggs    Did anyone hear that earlier?

Grant     I did.

Briggs    Grant. Good man. You’ve been working here yonks. What is a guaranteed annuity?

Grant     We sold tons of them in the eighties. They were part of the old style Retirement Annuity Plans. Didn’t know the guaranteed annuity rate was anything other than a marketing add-on to be honest. Something so low when it was added to the contract that it would never need to be exercised.

Briggs    Great! I’ve just been on this illustrious company’s  induction training and no bugger EVER mentioned these things. We spent a whole week on annuities. Mind you most of that time was spent learning how to persuade people to go into drawdown. Shit! And now I’ve lied to Mr Irwin.

Grant     Oh he used to be my client. I pooled him years ago. How come you’ve got him? He can be very tricky you know.

Briggs    Grant. I hate you. (He pauses and holds his head) He’s coming up to retirement and I’m sorting out the mess you left.

Grant     Yes sorry about that. He was overfunding his EPP wasn’t he?

Briggs    Yes. It’s sorted now. (He pauses again, deep in thought) Grant, have you ever heard about these guaranteed annuity rates giving loads more income?

Grant     No.

Briggs    Irwin has. He’s got the old policy doc out and is trying to claim his guarantee. It’s quite a lot more money.

Grant     How much?

Briggs    Six grand on 200K

Grant     Christ! How much?

Briggs    Six grand!

Grant     No way.

Briggs    Here. I’ve got the numbers. The system says his fund would pay £14,200. His policy doc says he can have £20,670. I’ve written it down right. I’m sure I have. He kept repeating the numbers.

Grant     That’s a mistake. Christ. (pause) If those figures are right then it means annuity rates today are SIGNIFICANTLY lower than the actuaries ever thought they would be. It means the guaranteed rates are higher than I EVER remember! Shit! And It means I have misled loads of my clients, especially recently.

Briggs    Me too. What do we do?

Grant     Pass me your phone. I’m calling a mate in HQ.  

He takes the phone from Briggs and presses buttons. He waits for an answer.

Cooper you old bastard. How are you? Still keeping our lovely customers happy?…Yeah I bet. Look mate, sorry if this is a real blast from the past and I’m sure I’m worrying about a bit of a red herring, but do you know much about these guaranteed annuity rate things from the eighties. When we were first on the road together we must have sold a fair few. Thing is we’ve got a client going berserk here about his policy document. He says we are robbing him of six grand. What’s the story? (There is a long pause.) Ok, ok, calm down. No we’ve said nothing. Ok mate keep your hair on. Ok bye. (Grant stares at the receiver.) How very peculiar. He normally blabs without thinking. Not today though. He ranted on about some nasty press conference, a troublemaking IFA and told me to stay out of it. He said there was going to be an emergency briefing in every branch at 8am tomorrow. Guess we’ll know more then.

Same day, 5.39 pm.

Scene - Royalty Life HQ. A very swanky office. Leather, oak and expensive modern art everywhere.  

Dash      So all the branch managers are expecting an e-mail briefing at 7.45 am? And they have all been instructed to read it to staff simultaneously at 8.00 am?

Maymes    Yes.

Dash      Good. Now, the emergency Board meeting. Have all the members been contacted?

Maymes    Just Sir Hugo outstanding. His press secretary is tracking him down. She is confident he will be there.

Dash      He’s got to be there. We need absolute Board backing on this. I must have unanimous support. Treadon, have you got the figures ready?

Treadon   Yes. Judy is just double-checking them. Once she’s done that, the whole lot will be loaded as a PowerPoint presentation. It will be ready for the 7.00 am meeting.

Dash      And the press release?

Maymes    Don’t worry. I sent it half an hour ago. Mind you whether the sewer-dwellers in Fleet Street are able to a) understand it and b) react quickly enough to it is another matter.

Dash      Good. Where is Cooper?

Maymes    He’ll be here in two minutes.

Dash      How did this happen? I thought Cooper had it all covered 

          The door opens. Cooper comes in. He looks flustered.

Cooper    Sorry all, I’ve been on the phone most of...

Dash      (Interrupting) No time for that. What has happened? Tell us straight. You said you were on top of this.

Cooper    I am (He pauses) I was. I mean I thought I was. It was just too big. The longer we went on….It has been a nightmare. More and more people have started to enquire. In 1994 there was 23, ’95 there were 21, ’96 there were 29. All dealt with easily. We settled. They went away. All signed a clause promising secrecy. Not one even squirmed a little bit when we made the offer conditional on the secrecy clause. Greed and all that. And it has been so smoothly done. No one at the branch has ever been involved. The reps know nothing. Then this year. January – 2 cases, Feb – 10, March – 29, April – 197. That was the last time we had the time to count. This month alone there are probably more than 300.

Dash      Christ! Why didn’t you tell us?

Cooper    I didn’t know I had to. The brief to me was very specific. Deal with it. Bottle it up. Keep it in house. I have reported numbers and costs each year without any interest from finance. I assumed no contact was a good sign. After all, you gave me this task four years ago. And since then annuity rates have continued to fall.

Dash      DID IT NOT CROSS YOUR MIND TO TELL US ABOUT THE SUDDEN INCREASE IN NUMBERS?

Cooper    Well, yes. (He pauses and looks nervous)It was in my end of quarter report.

Dash      Who has that report?

Maymes    Me Alan.

Dash      WHY HAVEN’T I SEEN IT?

Maymes    I think I can see it in your in-tray. About an inch down.

Dash      Buggeration! (He stops himself and looks embarrassed) Sorry, that was unnecessary.

Zeller    Can I ask something?

Dash      Please do.

Zeller    Well, if we have been paying in full, what sort of numbers are we talking about?

Dash      Cooper.

Cooper    Right. The way it works is this: say we have a customer with a fund of £100,000. His current rate would only give 7%, say £7,000, but the guaranteed rate would give 10% say £10,000. Now we don’t magically have access to higher rates and we can’t manufacture stats to give a 10% rate. The market annuity rate is 7% because of current low interest rates and higher average life expectancy figures. That is all we have to play with. So we have to increase the fund to a level that by the time we apply the current annuity rate to it, it produces what the guaranteed rate would have given. In plain English, the £100,000 fund has to be increased to £142,857. If you start with this sum and apply the 7% rate you get £10,000. Simple, but costly.

Zeller    Jesus H! That means in one case alone it could cost tens of thousands.

Cooper    Easily.

Dash      Estimated cost so far then?

Cooper    Well last year it cost £870,000 roughly. A drop in the Royalty ocean. I mean we saved that alone by adding an automated answer service in the complaints department. We made the process of complaining so difficult that a large number gave up trying to get through. On average though, each case has cost about £30,000. However, this year, so far ( He lingers for a few seconds) the costs are around £18m.

Maymes    Fuck!

Dash      Steady on Maymes! (There is a cross glare from Dash) We have standards in this building.

Maymes    Sorry Alan.

Treadon   This has to stop right now. We must not pay a single pound more than we have to from today onwards. Cooper, is that clear?

Cooper    Totally. I agree. Our clients have had it easy from us on this. I hate paying out more than we have to. Eats in to my bonus.

All       Quite right.

Dash      It ends here. We owe it to our other policyholders. If this goes on much longer we are finished.

Zeller    One last question. Where is all this extra funding coming from?

Dash      The With Profits fund. The reserves in it.

Zeller    But our whole strategy to date has been to strip the reserves to the minimum in order to make our bonus payments higher than any other insurer’s. This is precisely how my reps make so many massive sales. The public love our With Profits fund.

Dash      And so must they continue to. We can trade our way out of anything if we keep bringing the money in. When that stops, so does Royalty Life. Now, we are one of the oldest mutual societies in the world. I am not going to let something like this bring us down. NEVER.

Zeller    But can we stop paying out on the guarantees?

Dash      Of course. It’s all been dealt with and will be crystal clear tomorrow. Don’t you worry.  

Same day: 6.15 pm.

Scene – Maymes is in the Royalty Life car park. A mobile tyre specialist van is parked near his classy English sporty saloon. Maymes is pointing at one of the tyres while the man from  “Kwik Tyres” shrugs his shoulders. Maymes is clearly barking out some vitriol. He kicks the tyre.

Date: 15^th August 1997 – 7.30 am.

          Scene – Eton Branch conference room. Various reps fill the room wearing a variety of ridiculous pinstripes, which are all in dark blue, most with silk lining. All wear very shiny black brogues. Unnecessary braces peek out on hand made shirts. There is one female representative sitting reading a paper. She too is dressed in pinstripe, but it is a fitted suit with a pink shirt. She has long brown spiral hair.

Briggs    Morning all. Morning. Good moaning. Andrea, nice to see you could make it in. Grant, nice to see the festive braces have been given an early outing.

Grant     Style is something you have or you do not. I have it, you do not.

Briggs    Anyone know what this is about?

Grant     I hope it is the early posting of the bonus pool. I could do with an extra 10k. Running low on vintage Claret.

Briggs    What’s wrong with my Polish Riesling from Mastersons. Only £2.09 a bottle. You know you loved that one I gave you.

Grant     Only ever so slightly….in fact not at all. Proving to me also that like style, class is something you either have or you do not. Il va sans dire.

Briggs    Okey dokey then. Andrea, have you got the Beano tucked inside that Chronicle? I mean there are some big words in there.

Andrea    Funny.

Briggs    Not seen you for two days. How did the promotion screening go?

Andrea    Well, tell me what you think. I am in the middle of telling Maymes that I believe I have what it takes when he stops me and leans forward. He takes a brief moment to stare at my tits then says “You know Andrea, your sales figures are superb but we can’t put you in the training team with that East London accent. Have you considered elocution lessons?”

Briggs    He did not say that?

Andrea    He did.

Briggs    What did you do?

Andrea    I withdrew my application in a professional and dignified manner.

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