Quilter International and Friends Provident International are facing a multi-million pound lawsuit filed by investors who claim the insurers mis-sold "high-risk funds" under the guise of insurance wrappers to "unsophisticated British and international investors living overseas."
The £100m case, which is being filed in the Isle of Man courts, claims "the true level of risk that these investors were exposed to was obscured from both the investors and the IFAs who sold the products," according to the investors' lawyers, Signature Litigation.
The lawyers added: "By wrapping these funds in life assurance products and providing them via their offshore Isle of Man subsidiaries, the insurers effectively sidestepped UK regulations intended to only allow professional investors to invest in these funds.
The true level of risk that these investors were exposed to was obscured from both the investors and the IFAs who sold the products. The funds were unregulated and not intended for non-professional investors, and most information provided to investors came directly from the insurers.”
"The true level of risk that these investors were exposed to was obscured from both the investors and the IFAs who sold the products. The funds were unregulated and not intended for non-professional investors, and most information provided to investors came directly from the insurers."
A Quilter spokesperson said: "We sympathise with these customers, however Quilter International is the provider of the life assurance policy and does not provide advice in respect of any underlying investments, as that is the responsibility of the customer's investment adviser.
"We are aware that a number of claims have been issued in the Isle of Man court, although they have not been served on us at this stage. We will be robustly defending the claims."
Daniel Spendlove, a partner at Signature Litigation, said: "Much has been made of the power of litigation funding to level the playing field when individuals take on major companies, and this claim is a perfect example.
"Potential claimants will be able to seek redress for their lost investments without worrying that, by seeking justice, they will be plunged into further financial difficulty."
A statement from Friends Provident read: "Prior to entering into a policy, all policyholders are required to sign declarations acknowledging the nature of the portfolio bond, confirming that their independent financial adviser acts solely as their agent and has no authority to act on behalf of FPIL and accepting the risks associated with the investments they choose to make through the bond."
The case is being heard in the Isle of Man courts.
