Inherited Estate Update

Aviva PLC
02 February 2006


News release


2 February 2006



           AVIVA UPDATE ON POSSIBLE REATTRIBUTION OF INHERITED ESTATE


  • Clare Spottiswoode nominated as Policyholder Advocate



As previously announced, Aviva is reviewing the possibility of a reattribution
of the inherited estate, or orphan assets, of two of its with-profit funds; CGNU
Life and Commercial Union Life Assurance Company (CULAC). At this stage, no
decision has been taken to proceed with a reattribution. This will only be
undertaken if there are clear benefits for both policyholders and shareholders.


Under FSA rules, one condition of the new regulations (introduced in 2005) for
the reattribution of an inherited estate, is the appointment of an independent
Policyholder Advocate to represent policyholders during the procedure, a
development that Aviva welcomes. Aviva is delighted to announce that Clare
Spottiswoode has been nominated as the Policyholder Advocate and that the
Financial Services Authority (FSA) has approved this nomination.


As the nominated Policyholder Advocate, Ms Spottiswoode's initial period of work
will include:


•         Establishing an independent office

•         Setting up an independent technical team including actuarial and legal
support

•         Familiarisation with a reattribution scheme

•         Preparing detailed plans for consultation with policyholders

•         Finalising terms of reference



The actual appointment of the Policyholder Advocate would occur once terms of
reference are agreed, the FSA has fully considered the outline of any
reattribution scheme and if Aviva is fully satisfied that a reattribution is in
the clear interests of policyholders and shareholders. The appointment is not
expected to happen before the autumn of 2006.

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AVIVA UPDATE ON POSSIBLE REATTRIBUTION OF INHERITED ESTATE
Page 2 of 3



If Aviva does decide to proceed with a reattribution, then as the appointed
Policyholder Advocate, Ms Spottiswoode would negotiate with Aviva on behalf of
eligible policyholders.



Ms Spottiswoode, 52, is a former Director General of Ofgas (1993-98), the
regulator of the gas industry.  As Director General she spearheaded the
introduction of choice and competition in the provision of UK gas products and
services to the benefit of both commercial and domestic consumers. During her
career Ms Spottiswoode has acted as an economist at HM Treasury, lectured at
London Business School, managed private business interests, and held a number of
non-executive directorships.  She is a Commander of the British Empire (CBE).



Commenting on the nomination, Gary Withers, chief executive of Norwich Union
Life, said: 'We are delighted Clare Spottiswoode has agreed to represent
eligible with-profits policyholders in any reattribution. Her broad experience
as both a regulator and as a director makes her an ideal choice as a
Policyholder Advocate.'



Clare Spottiswoode said:  'I am looking forward to acting on behalf of
policyholders and I am impressed by the autonomy and independence of the
Policyholder Advocate's office. I will ensure that continues. My experience of
the financial services sector is as a customer and I will make sure that I
retain this perspective throughout when representing eligible policyholders - my
key responsibility is to ensure that they are treated fairly.



'A reattribution is a complex transaction but I will do everything possible to
explain the options in the clearest terms. As a result I'll need some time to
research the issues and hold discussions with Aviva and the FSA on the basic
terms. Subject to the reattribution going ahead, I expect to communicate with
policyholders in due course, but not before the autumn of 2006'.



Policyholders are reminded that they need take no action at this stage.





                                      Ends



Press office contacts:
Out of hours

Cheryl Cox                  01904 452617       07800 695275
James Evans                 01904 452791       07800 699525





AVIVA UPDATE ON POSSIBLE REATTRIBUTION OF INHERITED ESTATE
Page 3 of 3







Financial Dynamics

Rob Bailhache              0207 269 7200      07771 565659
Dominick Peasley           0207 269 7243      07748 474952



Analysts

Charles Barrows, investor relations director              [phone]

Nicole Marques, investor relations manager                [phone]







NOTES TO EDITORS

The inherited estate is the surplus of assets over policyholder liabilities that
will have accumulated over time in a with-profits fund. These surplus assets
arise from retained profits not distributed to shareholders or previous
generations of policyholders many years ago. With-profits companies distribute
payouts at a level to ensure that policyholders are treated fairly and receive
their asset share or guaranteed benefits, if higher, in accordance with the
Principles and Practices of Financial Management ('PPFM').

A reattribution is a transaction that enables a life company to reorganise a
part of its capital - the inherited estate - to benefit both policyholders and
shareholders. Under the transaction, shareholders offer policyholders a one-off
payment for giving up entitlement to any possible future distributions from the
inherited estate. Under a reattribution, the inherited estate, subject to
rigorous financial controls, remains within the life company to support the
capital of the with-profits fund as the policyholder payment is made by the life
company's shareholders.

Aviva is the world's sixth-largest insurance group based on gross worldwide
premiums and market capitalisation (at 31 December 2004).  It is one of the
leading providers of life and pensions in Europe and has substantial businesses
in other markets around the world.

Aviva's main activities are long-term savings, fund management and general
insurance, with worldwide total income of £40 billion and assets under
management of £280 billion (at 31 December 2004).

Norwich Union, a wholly owned subsidiary of Aviva plc, is the UK's biggest
insurer.  It is a leading provider of life, pensions and investment products and
one of the largest Financial Adviser (FA) providers.  FAs provide over 70% of
the company's long-term savings business in the UK.  Norwich Union has strategic
alliances with building societies and other leading UK brand names, including
CIS and The Royal Bank of Scotland Group.





                     This information is provided by RNS
            The company news service from the London Stock Exchange