What are they trying to hide?

Byline: TONY HAZELL

WHAT did your endowment company have to say? Find out on our internet site www.thisismoney.co.uk MONEY MAIL this week issues a challenge to the insurance industry. Come clean about endowments and give your policyholders the information they have a right to know.

We asked 35 insurance companies a simple question: how many of your 25-year endowment policies sold in 1985 and 1990 are still in force and how many have been cashed in?

Our request was met by a wall of silence. Only four were prepared to answer while the rest gave a mishmash of excuses and prevarication.

This question is vital to the debate about endowment mis-selling.

Endowments are long-term investments and only by holding them to maturity can you get full value.

They should not be sold to people who may not be able to fulfil the onerous commitment of paying every month for 25 years.

Some dropout is to be expected, but if most policies are still in force after ten or 15 years then it would immediately scupper accusations of mis-selling. However, if a high proportion of savers have given up on policies it would suggest there is a deep-rooted problem.

Staggeringly the chief regulator, the Financial Services Authority, failed to ask insurers these basic questions despite conducting a yearlong investigation into endowments and deciding there was no need for a review of sales.

Money Mail also asked insurers what proportion of 25-year endowments sold in 1975 had been held to maturity this year. This would reveal another aspect of the scandal.

In 1975 far fewer endowments were sold and the tax conditions were more favourable. It was only when banks and building societies started to tie-up with insurance companies in the late Eighties that endowment sales increased to four out of five mortgages.

If the dropout rate from 1985 and 1990 sales were greater than in 1975, it would again suggest that mis-selling had taken place by lenders keen to make extra money from selling endowments.

Only four insurers had the courage to come up with precise figures.

Clerical Medical's figures are most revealing. Of 623 policies sold in 1975, 564 or 90 pc are still in force.

By 1985, 3,636 were sold with 2,828 (78 pc) still in force.

But by the height of endowment selling fever in 1990, 11,375 were sold, yet just 5,986 (52 pc) are still running.

Barclays Life sold 537 endowments in 1986, 223 are still in force. In 1990 it sold 21,258 of which 9,851 (46 pc) are still in force.

Scottish Widows - one of the top performing insurers which sells via independent advisers - says 86 pc of its 1990 policies are still running.

Abbey National Life, which started in 1993, sold 15,000 that year, 11,000 of which are still going.

The excuses put up by the insurance industry for refusing to answer our questions beggar belief.

Legal & General flatly refused claiming these figures 'have not historically been in the public domain'.

Scottish Provident claimed: 'We don't have the figures to hand ... these are not the sort of figures we produce.' Standard Life said: 'That sort of information doesn't come readily to hand. I have no idea how long a piece of work like that would take. My initial gut feeling is that we do not have these records.' These excuses won't wash.

William Hewitson, the Government Actuary's Department directing actuary, says: 'Their (insurers) internal records certainly ought to contain all of this information.

'A bit of work and some sort of data interrogation system should be able to obtain that information if they're willing to do it.' Meanwhile, an FSA spokesman says it is taking on board Money Mail's concerns about the endowment scandal. 'We know companies can try to bamboozle people so we are giving them instructions on how to handle complaints. If they do not comply we will come down on them like a ton of bricks.' * The unhappy customers - see next page.

n JOHN and Polly Fogg, pictured, from Oxfordshire, swopped their repayment mortgage for an endowment mortgage for [pounds sterling]70,000 and a pension mortgage for [pounds sterling]80,000 after visiting a NatWest adviser.

Now they face a possible shortfall of [pounds sterling]7,700 on the endowment portion of their mortgage based on a 6 pc growth rate.

They cannot switch mortgages without paying a [pounds sterling]12,000 penalty on their [pounds sterling]150,000 loan as they took out a ten-year fixed rate of 8.99 pc which runs until 2004.

Mrs Fogg says: 'NatWest refused to meet us to talk about this, so we've been through their grievance procedure. They said we should have consulted our solicitor before taking out their loan.

'We trusted our bank to do what was right for us.They made us feel stupid.' Since her garage owner husband John is 55, she is worried that they only have nine years to make up the shortfall and top up his pension before he has to retire.

HELP US TO FIGHT FOR A FAIR DEAL WE plan to compile a dossier of the worst cases of endowment mis-selling which we will hand to the the chief regulator, Sir Howard Davies, and the Government.

To achieve this we need your help. We want you to tell us if you believe you have been mis-sold an endowment.We are particularly interested if whoever sold you the endowment has tried to fob off your complaints.

You may have been mis-sold if: nThe person who sold it did not explain your money was being invested in the stock market so you did not know there was a risk.

nThe salesman said the endowment would definitely pay off your mortgage.

nYou did not need the life assurance which is tied up in an endowment. For instance, you may have been single or you may already have had sufficient life assurance.

nThe endowment matures after your normal retirement date and the salesman did not investigate what your income would be in retirement.

* You were persuaded to cash in one endowment and buy another in its place.

Please write in briefly stating: WHEN you were sold the endowment.

WHO sold it to you.

WHICH insurance company the endowment is with.

WHY you believe you were mis-sold.

Please enclose copies (not originals) of: * Initial projections of how much money the endowment was supposed to produce and the most recent projections showing any shortfalls.

* Any marketing or sales material promising certain levels of performance.

* Any evidence that the salesman promised your mortgage would be repaid.

nYou name, address, daytime telephone number and a short note giving us permission to speak to the insurer about your policy.

Unfortunately we will not be able to respond to letters individually. Send your letters to Endowments, Money Mail, Daily Mail, 2 Derry Street, London W8 5TT.