Scottish Widows Ltd, Re [2019] EWHC 642 (Ch) (18 March 2019)

Scottish Widows Ltd, Re [2019] EWHC 642 (Ch) (18 March 2019)

The scheme is fair and reasonable in all the circumstances, given the imminent risk of loss of passporting rights post-Brexit, the need to ensure continuity of service for EEA policyholders, the adequacy of the associated arrangements to protect policyholders, and the absence of material prejudice or unfairness to any class of policyholders. The loss of FSCS protection is remote and outweighed by the benefits of the scheme. All statutory and regulatory requirements are satisfied.

Citation
[2019] EWHC 642 (Ch)
Parties
Applicant: Scottish Widows Limited; Applicant: Scottish Widows Europe S.A.; Regulator: Prudential Regulation Authority; Regulator: Financial Conduct Authority
Jurisdiction
England and Wales
Judgment Date
18 March 2019
Procedural Posture
Part VII Insurance Business Transfer Scheme / Sanction Hearing and Final Order
Outcome
Scheme sanctioned
Legal Topics
Part VII Transfer, Brexit Contingency Planning, Passporting Rights, Insurance Business Transfer, Policyholder Protection, Solvency Requirements, Regulatory Compliance
Insurance Law Financial Regulation Insolvency Law European Union Law Part VII Transfer Brexit Contingency Planning Passporting Rights Insurance Business Transfer +3 more

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Parties

Scottish Widows Limited

Applicant

Scottish Widows Europe S.A.

Applicant

Prudential Regulation Authority

Regulator

Financial Conduct Authority

Regulator

Procedural Posture

Part VII Insurance Business Transfer Scheme / Sanction Hearing and Final Order

Legal Issues

  1. 1 Whether the proposed insurance business transfer scheme under Part VII of FSMA should be sanctioned
  2. 2 Whether the scheme is fair and does not materially prejudice policyholders or other interested parties
  3. 3 Whether the loss of FSCS protection and changes in regulatory regime are justified and reasonable

Ratio Decidendi

The scheme is fair and reasonable in all the circumstances, given the imminent risk of loss of passporting rights post-Brexit, the need to ensure continuity of service for EEA policyholders, the adequacy of the associated arrangements to protect policyholders, and the absence of material prejudice or unfairness to any class of policyholders. The loss of FSCS protection is remote and outweighed by the benefits of the scheme. All statutory and regulatory requirements are satisfied.

Court Disposition

Scheme sanctioned

Orders

  • Sanction of the insurance business transfer scheme under Part VII FSMA
  • Ancillary orders under section 112 FSMA to give effect to the transfer, including transfer of property, rights, liabilities, and continuation of legal proceedings