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Principles and Practices of Financial Management (PPFM)

How we manage our with-profits funds

We have produced with-profits guides to explain the main points about how we currently manage our with-profits funds for different types of with-profits policy. The guides cover the key points from the detailed technical guides called the Principles and Practices of Financial Management (PPFM) documents, but are not replacements for them. Please see the PPFMs for a fuller description of how we manage our with-profits funds.

Principles and Practices of Financial Management (PPFM)

The principles and practices of financial management (PPFM) are the standards we apply to the management of our with-profits business.

Principles

The principles of financial management are the high-level standards we follow when managing a with-profits fund. They describe how we will meet our duties to investors in a with-profits fund and how we will respond to changes in the business and economic environment in the longer term.

We do not expect these principles to change often. However, if we intend to change any of the principles, we will normally tell investors, in writing, at least three months before the proposed changes come into force. In certain circumstances, we may be able to obtain from our regulator, the Financial Services Authority, permission to notify investors in a different way or with a shorter notice period.

Practices

The practices of financial management are the detailed methods that we use to ensure that we meet the principles. They represent the current approach we use to manage a with-profits fund and to respond to changes in the business and economic environment in the shorter term.

As a result, the practices may change as our circumstances, financial management techniques, the business and regulatory environment and other factors change. We will tell investors, in writing or by some other means approved by the Financial Services Authority, about any changes we make to the practices. We may do this, for example, by including such information with investors' next yearly, or half-yearly, statements after the changes have been made.

Read our annual report on how we have complied with our PPFMs

PPFM changes – notification to policyholders

The following table shows the with-profits guides and PPFM for different types of with-profits policy.