Emma RadmoreThe High Court has approved a Part VII transfer of an insurance portfolio from Legal and General to Reassure. The portfolio includes around 900,000 insurance-based savings, pensions, life and with-profits business and the transfer follows a strategic decision by L&G to move aware from “mature” savings products. The transferring business has been in run off since 2015.
The parties felt the Transferring Business was compatible with ReAssure’s business model and ReAssure was better placed to manage it.
The Court looked at the “significant benefits” the transfer would offer to the policyholders as well as the insurers.
As required, the court, and the Independent Expert considered, the solvency capital requirements, risk appetite and governance and the availability of additional support. On all fronts, it found ReAssure an appropriate transferee. However, it had to hear the objections by policyholders (which PRA and FCA had previously considered and confirmed they did not cause them to change their views on the scheme). The objectors were mainly from the L&G side, and mainly were because they had chosen L&G specifically as their original provider and knew nothing about ReAssure. The court, however, looked at all the issues. The court discussed the Prudential/Rothesay transfer, which the court had refused to sanction when policyholders objected to the transferee. However, the judge noted significant differences, not least that in this case the vast majority of transferring policyholders could change provider if they wished, and that, because of the products involved, many policyholders as with-profits annuitants stood to gain at least some benefit from the terms of the scheme. Also, critically, unlike Rothesay, ReAssure is part of a substantial and well-capitalised group.
Ultimately, the judge was satisfied that the Scheme was in all the circumstances fairl, and so sanctioned it.