Pretty much cheers all round then as Aviva, the UK's number-one insurer, finally unveils a proposal to share £1 billion of the surplus in its with-profits funds between about 1 million policyholders?

Under the terms of the proposal, policyholders will receive at least £400 each, with an average payout of £1,000. Some lucky policyholders will collect around £3,000 apiece, with a few celebrating a few thousand more.

Aviva says today's deal is good news for 93 per cent of the policyholders at Norwich Union, its subsidiary, who are eligible for the handout.

Clare Spottiswoode, the policyholder advocate, says she's delighted at a deal that means policyholders receive about 48 per cent of the so-called inherited estate and shareholders collect about 52 per cent.

Convention has been 90/10 in favour of policyholders. But they have already received a one-off special bonus earlier this year. After that is taken into account, the split is 69/31, in favour of policyholders — on the face of it, not bad at all.

Grimmest predictions had suggested a harsher deal for NU customers, thousands of whom have died before the payout was agreed.

The Financial Services Authority, the watchdog whose guidelines made the process possible in the first place, says that at first glance the reattribution deal, which involves a cash payment to policyholders in exchange for their foregoing the right to future bonus payments, is fair.

Mark Hodges, the chief executive of Aviva's life business in the UK and the chief negotiator on the part of the insurer, is to be congratulated for finalising the terms after a complex process fraught with consumer nerves and political tensions.

The fund remains strong and the payouts, when they come, will be taken from shareholder capital, not the with-profits book.

There are perhaps two things that rankle, though.

First, policyholders will have to wait about a year before receiving their cash. Aviva must write to each of them individually and visit the High Court twice to gain clearance to pay.

Embarking on the process has already lasted almost two years — Ms Spottiswoode's appointment was in November 2006, some 20 months ago.

Second, during the first half of the year adverse market movements have wiped a full £550 million off the value of the £2.65 billion part of the fund to be distributed.

Not all of that would have been paid to policyholders if the insurer had moved more swiftly, of course.

But some of it would.

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