Excess Insurance Company Ltd & Ors, Re [2015] EWHC 3572 (Ch) (08 December 2015)

Excess Insurance Company Ltd & Ors, Re [2015] EWHC 3572 (Ch) (08 December 2015)

The scheme is fair and appropriate to sanction because the new protections (capital injection and ADC Reinsurance) provide equivalent or improved security to policyholders compared to the uncertain and limited benefit of the Guarantee. The exclusion of the Guarantee does not materially worsen the position of any policyholder group, and the scheme meets all statutory and regulatory requirements.

Citation
[2015] EWHC 3572 (Ch)
Parties
Claimant: Excess Insurance Company Limited; Claimant: Hartford Fire Insurance Company, UK Branch; Claimant: Aviva Insurance Limited; Claimant: Hartford Financial Products International Limited; Interested Party: Prudential Regulation Authority; Objectors: ACE Policyholders (Century Indemnity Company and ACE Property & Casualty Company)
Jurisdiction
England and Wales
Judgment Date
08 December 2015
Procedural Posture
Insurance Business Transfer Scheme Sanction Application / Sanction Hearing and Final Order
Outcome
Scheme sanctioned and approved
Legal Topics
Insurance Business Transfer, Sanction of Schemes, Policyholder Protection, Regulatory Compliance, Guarantee Enforceability
Insurance Law Financial Regulation Company Law Insurance Business Transfer Sanction of Schemes Policyholder Protection Regulatory Compliance Guarantee Enforceability

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Parties

Excess Insurance Company Limited

Claimant

Hartford Fire Insurance Company, UK Branch

Claimant

Aviva Insurance Limited

Claimant

Hartford Financial Products International Limited

Claimant

Prudential Regulation Authority

Interested Party

ACE Policyholders (Century Indemnity Company and ACE Property & Casualty Company)

Objectors

Procedural Posture

Insurance Business Transfer Scheme Sanction Application / Sanction Hearing and Final Order

Legal Issues

  1. 1 Whether the proposed insurance business transfer scheme should be sanctioned under section 111(1) of the Financial Services and Markets Act 2000
  2. 2 Whether exclusion of the Deed of Guarantee materially prejudices policyholders
  3. 3 Whether the scheme is fair as between affected classes of persons

Ratio Decidendi

The scheme is fair and appropriate to sanction because the new protections (capital injection and ADC Reinsurance) provide equivalent or improved security to policyholders compared to the uncertain and limited benefit of the Guarantee. The exclusion of the Guarantee does not materially worsen the position of any policyholder group, and the scheme meets all statutory and regulatory requirements.

Court Disposition

Scheme sanctioned and approved

Orders

  • Order sanctioning the insurance business transfer scheme under section 111(1) of the Financial Services and Markets Act 2000 with immediate effect