First Alternative Insurance Company Ltd v Esure Insurance Ltd

First Alternative Insurance Company Ltd v Esure Insurance Ltd

The statutory requirements for sanctioning the insurance business transfer scheme were satisfied, the independent expert confirmed that policyholder security would not be adversely affected, and sufficient capital would remain post-transfer. The return of surplus capital to shareholders was justified by overcapitalisation and did not compromise policyholder protection. It was therefore appropriate to sanction the scheme.

Parties
Claimant: First Alternative Insurance Company Limited; Defendant: Esure Insurance Limited
Jurisdiction
England and Wales
Judgment Date
14 March 2007
Procedural Posture
Part 8 Claim (insurance Business Transfer Scheme) / Judgment on Application for Court Sanction of Insurance Business Transfer Scheme
Outcome
Scheme sanctioned
Legal Topics
Insurance Business Transfer, Court Sanction of Schemes, Financial Services and Markets Act 2000, Capital Adequacy, Policyholder Protection
Insurance Law Company Law Financial Regulation Insurance Business Transfer Court Sanction of Schemes Financial Services and Markets Act 2000 Capital Adequacy Policyholder Protection

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Parties

First Alternative Insurance Company Limited

Claimant

Esure Insurance Limited

Defendant

Procedural Posture

Part 8 Claim (insurance Business Transfer Scheme) / Judgment on Application for Court Sanction of Insurance Business Transfer Scheme

Legal Issues

  1. 1 Whether the statutory requirements for sanctioning an insurance business transfer scheme under section 111 of the Financial Services and Markets Act 2000 are satisfied
  2. 2 Whether it is appropriate in all the circumstances to sanction the scheme

Ratio Decidendi

The statutory requirements for sanctioning the insurance business transfer scheme were satisfied, the independent expert confirmed that policyholder security would not be adversely affected, and sufficient capital would remain post-transfer. The return of surplus capital to shareholders was justified by overcapitalisation and did not compromise policyholder protection. It was therefore appropriate to sanction the scheme.

Court Disposition

Scheme sanctioned

Orders

  • The insurance business transfer scheme is sanctioned as per the draft order with amendments discussed in argument.