Combined Insurance Company of America (CICA), Re

Combined Insurance Company of America (CICA), Re

It is not appropriate to require the Applicants to give individual notification to former policyholders at this stage. The benefit to former policyholders and to the process is insubstantial, while the disadvantages include cost, potential confusion, and the risk of raising false hope. Adequate safeguards exist through notification to current policyholders, general advertising, and the undertakings offered by the Applicants. The court will not impose the direction sought by the FSA.

Parties
Transferor: Combined Insurance Company of America; Transferee: ACE European Group Limited; Transferee: ACE Europe Life Limited; Regulator: Financial Services Authority
Jurisdiction
England and Wales
Judgment Date
16 March 2012
Procedural Posture
Application for Directions Under Part VII of the Financial Services and Markets Act 2000 / Preliminary Directions Hearing
Outcome
Application granted in part; direction for individual notification to former policyholders refused.
Legal Topics
Transfer of Insurance Business, Policyholder Notification, Regulatory Compliance, Consumer Protection
Insurance Law Financial Regulation Transfer of Insurance Business Policyholder Notification Regulatory Compliance Consumer Protection

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Parties

Combined Insurance Company of America

Transferor

ACE European Group Limited

Transferee

ACE Europe Life Limited

Transferee

Financial Services Authority

Regulator

Procedural Posture

Application for Directions Under Part VII of the Financial Services and Markets Act 2000 / Preliminary Directions Hearing

Legal Issues

  1. 1 Whether the Applicants should be required to give individual notice of the proposed transfer scheme to certain former policyholders potentially affected by a Past Business Review (PBR)

Ratio Decidendi

It is not appropriate to require the Applicants to give individual notification to former policyholders at this stage. The benefit to former policyholders and to the process is insubstantial, while the disadvantages include cost, potential confusion, and the risk of raising false hope. Adequate safeguards exist through notification to current policyholders, general advertising, and the undertakings offered by the Applicants. The court will not impose the direction sought by the FSA.

Court Disposition

Application granted in part; direction for individual notification to former policyholders refused.

Orders

  • Directions as discussed and identified at the hearing granted, excluding individual notification to former policyholders.
  • Applicants and FSA to resolve the content of notices to current policyholders regarding the PBR, or apply to court if unresolved.