In the matter of Monument Insurance [2020] JRC 021 (03 February 2020)

judgment the deputy bailiff: 1. This Court is considering a representation today by Monument Insurance Designated Activity Company ("MIDAC"), Monument Assurance Designated Activity Company ("MADAC") together described as "Monument", and Laguna Life Designated Activity Company ("Laguna"). Those companies seek the sanction of an insurance business transfer scheme defined as the "Jersey Scheme," pursuant to Article 27 and the Schedule 2 to the Insurance Business (Jersey) Law 1996.

2. In fact, these three companies are connected; Laguna is a wholly owned subsidiary of MADAC which in turn is wholly owned by MIDAC. They are Irish companies and the top company is owned by a Bermuda company, Monument Re Limited. Today the representors seek directions in relation to a preliminary issue regarding the notification of policy holders and members of the representors in relation to the proposed Jersey Scheme.

3. The transfer forms part of a wider transfer of the long term and general insurance business between the same parties in Ireland and in Guernsey and their corresponding Irish and Guernsey schemes, which also need to be sanctioned by the courts of those jurisdictions. The reason that an application is being made to this Court is there are in excess of 400 Jersey resident policy holders.

4. As I have said, today's application deals purely with certain aspects of the requirements contained in the second schedule to the Insurance Business (Jersey) Law 1996 which considers the transfer of insurance business. Paragraph 1 of Schedule 2 provides that: "Where it is proposed to carry out a scheme under which the whole or part of the insurance business carried on in or from within Jersey by a permit holder (the "transferor company") is to be transferred to another body whether incorporated or not (the "transferee company") the transferor company or transferee company may make a Representation to the Court for an order sanctioning the scheme." And paragraph 3 provides: "The Court shall not determine an application under this Schedule unless the Representation to the Court is accompanied by a report on the terms of the scheme by an independent actuary and the Court is satisfied that the requirements of paragraph 4 have been complied with." 5. For the purposes of today, the relevant provisions under paragraph 4 are within 4(b), and the requirements under 4(b) are that; "(b) except where the Court has otherwise directed, that a statement - (i) setting out the terms of the scheme, and (ii) containing a summary of the report mentioned in paragraph 3 sufficient to indicate the opinion of the actuary on the likely effects of the scheme on the policy holders of the companies

concerned, has been sent to each of those policy holders and to every member of those companies;" 6. It is common for these requirements to be dispensed with, and in the case of Representation of Tunbridge Wells Equitable Friendly Society and Forester Life [2013] JRC 003 the Royal Court (Sir Michael Birt presiding) said "The Court has dealt with many applications for transfers of insurance business under Article 27 and almost invariably the representors ask the Court to 'otherwise direct' under paragraph 4(b) because it is usually either impracticable or completely unnecessary for all the details of the scheme and the full actuary's report to be sent to all the policy holders and members of both the transferor and the transferee company. The Court is usually asked to accept that the company will send broad details of the scheme and a summary of the report to those policy holders who are likely to be affected by the Jersey scheme." The Court is asked to make a similar order today.

7. Distinction needs to be drawn between notification to members of the representor and notification to policy holders of the representors. In respect of notification to the members this is unnecessary. The three representors are owned in the way that I have described and the directors of the three representor companies, and the Bermudan company which holds the shares in MIDAC, are fully aware of the proposed transfer and the details of all three schemes.

8. Accordingly, the Court is content for there to be dispensation of the requirement in 4(b) in relation to the members of the companies affected.

9. As regards notification to policy holders, this has been considered by the representors and addressed in the affidavit and other evidence before us. The representors wish to dispense with the requirement to notify existing Laguna policy holders as the scheme will have no material effect on them. The independent actuary is content with the approach by way of communication to all those affected by the Jersey and other schemes, and accordingly the Court is concerned today with the communication strategy for the Jersey resident policy holders. The representors intend to send a letter to the last known address of each policy holder in Jersey. The Court has seen, considered, suggested amendments to and approved (as amended) the draft letter, and the court has also seen the precis of independent actuary's report which has been approved by the independent actuary. The independent actuary has also reviewed the contents of the policy holder letter and confirmed that he has no difficulties with it. In particular, the draft policy holder letter identifies the date of the sanction hearing and notifies recipients that they can make representations or raise objection to the Jersey scheme. It also gives them the means to access a full copy of the independent actuaries report and all three schemes.

10. In the circumstances, the Court is content to proceed as sought by the representors and has made orders in accordance with the draft orders as discussed and revised in the course of the hearing. Authorities Insurance Business (Jersey) Law 1996 Representation of Tunbridge Wells Equitable Friendly Society and Forester Life [2013] JRC 003 . Page Last Updated: 11 Feb 2020 BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII