- High Court approves Part VII transfer of £12bn annuity business from the Pru to Rothesay, second time round (Prudential Assurance Company Ltd and In the Matter of Rothesay Life plc)
- Background to the application and the original hearing
- The Court of Appeal’s decision and the approach to the sanction of Part VII applications
- The sanctions hearing before Trower J
- Status of the independent expert report
- Matching adjustment—a peacock’s feathers?
- Other objections to the scheme
- The judge’s conclusions
- Case details
Insurance & Reinsurance analysis: It was approximately three years ago when the Prudential Assurance Company (PAC) first embarked on its application to the High Court for sanction of a Part VII FSMA insurance business scheme. PAC wished to transfer a substantial portfolio of its long-term insurance products (some 370,000 odd annuity policies) to Rothesay Life plc (Rothesay) for the commercially-motivated purpose of achieving a regulatory capital release. Following a directions hearing at first instance in early 2019, PAC and Rothesay’s application came before Mr Justice Snowden in the summer of 2019. Several policyholders (about 15%) had objected to the proposed scheme and several made written and/or oral representations at court. For the first time in history, the High Court refused to sanction the Part VII transfer. In November 2020, the Court of Appeal allowed PAC and Rothesay’s appeal and remitted the case to the High Court for a renewed sanctions hearing. In November 2021, Mr Justice Trower considered the proposed scheme and concluded that, in all the circumstances of the case, it was a scheme that he should sanction. Written by Charlotte Eborall, barrister at 3 Verulam Buildings.
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