Prudential Assurance Company Ltd, Re

Prudential Assurance Company Ltd, Re

The court refused to sanction the scheme because, although the independent expert and regulators found no material adverse effect on policyholders' security of benefits or service standards, the court found that the compulsory transfer of lifetime annuities from PAC—a long-established, reputable insurer with substantial group support—to Rothesay—a newer, smaller company without equivalent backing—imposed a material disadvantage on policyholders. The court held that policyholders reasonably assumed PAC would not transfer their policies, and the commercial objectives of PAC and Rothesay did not outweigh the significant change in policyholder status and expectations. Therefore, it was not...

Parties
Applicant: The Prudential Assurance Company Limited; Applicant: Rothesay Life Plc; Regulator: Prudential Regulation Authority; Regulator: Financial Conduct Authority; Objectors: Policyholders (various, including Mrs. Rosemary Harper, Mr. Anthony Kell, Mr. David Mitchell, Mr. Thomas Copsey, Dr. Jay Ginn, Mrs. Penelope Howell, Mrs. Kornelia Robertson, Mr. John Barrow)
Jurisdiction
England and Wales
Judgment Date
16 August 2019
Procedural Posture
Insurance Business Transfer Scheme (part VII Fsma) / Application for Court Sanction
Outcome
application for sanction of the scheme refused
Legal Topics
Part VII Transfer, Annuity Policy Transfer, Court Sanction Discretion, Policyholder Protection
Insurance Law Financial Regulation Part VII Transfer Annuity Policy Transfer Court Sanction Discretion Policyholder Protection

Case Brief

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Parties

The Prudential Assurance Company Limited

Applicant

Rothesay Life Plc

Applicant

Prudential Regulation Authority

Regulator

Financial Conduct Authority

Regulator

Policyholders (various, including Mrs. Rosemary Harper, Mr. Anthony Kell, Mr. David Mitchell, Mr. Thomas Copsey, Dr. Jay Ginn, Mrs. Penelope Howell, Mrs. Kornelia Robertson, Mr. John Barrow)

Objectors

Procedural Posture

Insurance Business Transfer Scheme (part VII Fsma) / Application for Court Sanction

Legal Issues

  1. 1 Whether the court should sanction the transfer of annuity policies from PAC to Rothesay under Part VII FSMA
  2. 2 Whether the scheme materially adversely affects policyholders' security of benefits or reasonable expectations
  3. 3 Whether the selection and compulsory transfer of annuity policies is fair and appropriate

Ratio Decidendi

The court refused to sanction the scheme because, although the independent expert and regulators found no material adverse effect on policyholders' security of benefits or service standards, the court found that the compulsory transfer of lifetime annuities from PAC—a long-established, reputable insurer with substantial group support—to Rothesay—a newer, smaller company without equivalent backing—imposed a material disadvantage on policyholders. The court held that policyholders reasonably assumed PAC would not transfer their policies, and the commercial objectives of PAC and Rothesay did not outweigh the significant change in policyholder status and expectations. Therefore, it was not...

Court Disposition

application for sanction of the scheme refused

Orders

  • The court declines to sanction the proposed transfer scheme under Part VII FSMA.