MPs and peers have accused LV= of being “less than candid” with its 1.25 million members about a £530 million plan to sell the mutual insurer to Bain Capital, the private equity firm.
An inquiry by the all-party parliamentary group for mutuals has concluded that the insurer’s leadership team “has not been open and transparent with the members about its intentions for the company”.
The report, published last night, criticises a lack of information from the mutual. “The fact that the board will move ahead to conclude a deal with Bain Capital in advance of providing any meaningful information to its membership shows a disregard for the interest of members and a cavalier attitude towards the member governance of this business,” it says. Citing “a pattern of behaviour where the leadership at LV= was less than candid with its members”, it recommends the takeover for scrutiny by either the Commons’ Treasury committee or the Lords’ economic affairs committee, as well as by the Competition and Markets Authority.
The Bournemouth-based LV= agreed the sale in December and will put it to a member vote. Formerly known as Liverpool Victoria, the 178-year-old group is one of Britain’s last mutuals. The review took evidence from Mark Hartigan, its chief executive.
The mutual said it was disappointed by the report, adding: “We have always recognised the importance of equipping our 1.25 million members with all of the information they need to help them make an informed decision in advance of the vote and this continues to remain our absolute priority.”
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The parliamentary group also criticised City regulators for having failed to review the impact of previous demutualisations. The Financial Conduct Authority said its “objective is to ensure that LV= can demonstrate that the deal is fair to its members and, when they vote on it, they have the information to make an informed choice”.
Bain said it was “excited about the prospect of being able to help strengthen LV=’s financial position and provide significant value to its members”.
