Campaigners want the company to demutualise

Retired lecturer David Stonebanks wants policyholders to be allowed to vote on whether it should give up its mutual status and become a stock market company.

Mr Stonebanks, 63, from Hertfordshire, said nearly 2,000 members are backing his campaign, and on Tuesday he handed in a petition at the Edinburgh's headquarters demanding a vote for demutulisation.

The insurer fought off a demutualisation bid, three years after it successfully fought off the last one.

Large windfalls

Anyone bringing forward such a move is required to produce 1,000 signatures to force a vote.

Companies who gave up mutual status in the past have brought the potential for large windfalls.

However, falling stock market values over the past few years mean any payouts would now be much lower.

It doesn't seem to me that the case has been proven and I can't believe the policy owners going forward would necessarily be that much better off if this proposal was to go through Michael Hughes

Mr Stonebanks has calculated that if Standard Life was floated on the stock market, policyholders could pocket free shares averaging between �2,000 and �2,500.

The insurer has cut its bonuses to policy holders on three occasions and David Stonebanks believes anger over these cuts will help his campaign succeed.

He told BBC Radio Scotland: "It's only 40% of a loaf, but 40% of a loaf is still very welcome to people who have had substantial cuts in their policy values over the last few years."

But Standard Life spokesman Gordon Arthur said the company will fight the proposal.

He said: "The biggest thing in our favour is the out-performance of our policies against our plc competitors.

"This underlines to people why it's a much better idea to keep the company mutual than to be lured into the prospect of windfall payments which may only amount to a few hundred pounds."

Mr Stonebank predicts payouts of up to �2,500

The real issue in all of this, argues Michael Hughes, an investment director with Baring Asset Management, is whether the company will be better managed by being a public company.

Mr Hughes said: "Will the company be managed differently and are the payouts to policy holders down the line going to be higher?

"If the answer to both these questions is yes, then there is a case.

"But it doesn't seem to me that the case has been proven and I can't believe the policy owners going forward would necessarily be that much better off if this proposal was to go through."

If Mr Stonebanks' petition is valid, Standard Life will have to call a special meeting within three months.