Prudential Annuities Ltd & Ors, Re
2014
CHANCERY DIVISION
United Kingdom
CORAM
- MR JUSTICE BIRSS
Areas of Law
- Banking and Finance Law
- Insurance Law
2014
CHANCERY DIVISION
United Kingdom
CORAM
AI Generated Summary
This case involves sanctioning an insurance business transfer scheme where Prudential Annuities Limited's long-term business is transferred to The Prudential Assurance Company Limited. The purpose is to improve Prudential UK's corporate structure and capital management. The transfer, impacting approximately 90,000 policyholders, was thoroughly reviewed by the PRA and FCA, both of which raised no objections. Despite some policyholders' concerns, the court approved the scheme, having determined it met all FSMA requirements and would not materially change policyholders' positions.
Judgment
Mr Justice Birss :
This is an application for the sanction of the court to an insurance business transfer scheme under which the entire long-term insurance business of Prudential Annuities Limited (PAL) is to be transferred to The Prudential Assurance Company Limited (PAC). Ancillary orders are sought under s112 of the Financial Services and Markets Act 2000 (FSMA).
The purpose of the transfer is to simplify the corporate structure of Prudential UK’s business and improve the flexibility and efficiency of capital management. The transfer is intended to facilitate Prudential’s response to regulatory developments, such as the EU legislative programme Solvency II (Directive 2009/138/EC). The business transferred will be allocated to PAC’s with-profits sub-fund (WPSF).
The two relevant regulators, that is to say the Prudential Regulatory Authority (PRA) and the Financial Conduct Authority (FCA) have both considered the scheme. The PRA has confirmed that it is not aware of any issue that would cause it to object to the scheme. The FCA has confirmed that it is satisfied that the scheme is within the range of reasonable and fair schemes available to PAL and PAC and that, accordingly, it does not object to the Scheme.
The scheme concerns approximately 134,000 contracts of long-term insurance business (all of which are non-profit pension policies) and affects about 90,000 policyholders. Policyholders are individual annuitants and corporate pension schemes. By the hearing on 16 th September, none had indicated that they might attend at court and object and on the day none did. Nevertheless a number of points were raised in writing by policyholders and I will return to those points below.
Mr Moore QC appears for both PAL and PAC, instructed by Hogan Lovells. Ms Shah appears for the PRA. The FCA was not represented at the hearing.
The matter commenced as a Part 8 Claim on 25 th June 2014 and came before Deputy Registrar Briggs on 3 July 2014, when the Deputy Registrar gave directions for the publication of notices and for the final hearing to be listed. The hearing before me on 16 th September was the final hearing of the application to sanction the scheme. At the hearing I indicated that I would approve the scheme, with my reasons to be given afterwards. This judgment sets out those reasons. At the time I indicated that I would try to have the reasons available for hearings which were to take place later in September in Jersey and Guernsey but regretta