Scottish Widows Ltd, Re

Scottish Widows Ltd, Re

The Scheme is sanctioned because it is necessary to ensure continuity of service for EEA policyholders in light of Brexit-related loss of passporting rights. The Scheme does not cause material adverse effect to policyholders, as confirmed by the Independent Expert and regulators. The associated arrangements (Reinsurance, Charge, Indemnity Agreements) are adequate to protect policyholders. The loss of FSCS protection is outweighed by the need for certainty and the strong solvency of SWE. The amendment to the 2015 Scheme is also approved as it does not materially adversely affect policyholders.

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
Insurance Business Transfer Scheme (part VII Transfer) / Final Sanction Hearing and Approval
Outcome
Scheme sanctioned and amendment to 2015 Scheme approved
Legal Topics
Part VII Transfer, Brexit Contingency Planning, Policyholder Protection, Cross Border Insurance Business, Regulatory Approval
Insurance Law Financial Services Regulation Company Law Part VII Transfer Brexit Contingency Planning Policyholder Protection Cross Border Insurance Business Regulatory Approval

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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

Insurance Business Transfer Scheme (part VII Transfer) / Final Sanction Hearing and Approval

Legal Issues

  1. 1 Whether the proposed insurance business transfer scheme (the Scheme) should be sanctioned under Part VII of the Financial Services and Markets Act 2000 (FSMA)
  2. 2 Whether the Scheme is fair and does not cause material adverse effect to policyholders, including in relation to security of benefits, loss of FSCS protection, and regulatory changes
  3. 3 Whether the associated arrangements (Reinsurance Agreement, Charge Agreement, Indemnity Agreement) are adequate and fair

Ratio Decidendi

The Scheme is sanctioned because it is necessary to ensure continuity of service for EEA policyholders in light of Brexit-related loss of passporting rights. The Scheme does not cause material adverse effect to policyholders, as confirmed by the Independent Expert and regulators. The associated arrangements (Reinsurance, Charge, Indemnity Agreements) are adequate to protect policyholders. The loss of FSCS protection is outweighed by the need for certainty and the strong solvency of SWE. The amendment to the 2015 Scheme is also approved as it does not materially adversely affect policyholders.

Court Disposition

Scheme sanctioned and amendment to 2015 Scheme approved

Orders

  • The insurance business transfer scheme under Part VII FSMA is sanctioned.
  • Ancillary orders under section 112 FSMA are granted to give effect to the Scheme.