March 2008
Paul Bugden, Partner in Clyde & Co LLP
Since the first insurance business transfer scheme was approved in late 2001 they have grown enormously in popularity. This article reviews the background to such schemes in the UK and how they contrast with the procedures in other European states. It also reviews the purposes for which schemes are used and considers how policyholder protection is achieved and the issues which arise where policyholders consider they may be adversely affected by a proposed transfer.
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September 2007
Run off update
The FSA invites comments on new arrangements for Part VII transfers
Part VII of the Financial Services and Markets Act 2000 ("FSMA") requires an application
made to court for an order sanctioning an insurance business transfer scheme to be
accompanied by a report by an independent expert on the terms of the scheme. The FSA also
has the right to participate in the proceedings.
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June 2007
Insurance business transfer in Hong Kong
With the increasing popularity of insurance business transfers in the UK , we take the opportunity to look at the insurance business transfer regime in Hong Kong. There are various reasons why an insurer (the transferor) may wish to transfer some or all of its insurance business or why an insurer (the transferee) may wish to acquire an insurance business. Kendall Freeman, June 2007.
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June 2007
A further step forward for Part VII transfers - Sompo Japan Insurance Incorporated and Transfercom Limited
This recent sanction of an insurance business transfer under Part VII of the Financial Services and Markets Act 2000 (FSMA) (reference [2007] EWHC 146 (Ch)), where only 27% of the transferring policies were governed by English law, demonstrates a willingness by the English courts to allow such schemes to proceed in circumstances where there are serious questions about their worldwide enforceability. This is encouraging for insurers and reinsurers who wish to use the Part VII procedure on books of business which include a high proportion of policies governed by the laws of other jurisdictions. Kendall Freeman, June 2007.
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March 2007
7 March 2007. Deloitte and Addleshaw seminar on current developments with regard to Part VII transfers
On 7 March 2007 Deloitte and Addleshaw Goddard jointly held a seminar on current developments with regard to Part VII transfers. The seminar considered circumstances where Part VII transfers can be used to shift portfolios of business, recent challenges which have been made to Part VII transfers and the role of the independent expert.
Download Seminar Slides (pdf) | Download Seminar Slides (powerpoint)
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February 2007
Clarifying Rights or Stifling Dissent: reinsurers' and policyholders' rights to object to Part VII transfers
In the UK, insurance business transfer schemes (known as Part VII transfers) result in the novation of portfolios of insurance or reinsurance business from one insurer or reinsurer to another by way of a court sanctioned regulatory mechanism. They have become a key tool within the London market as group reorganisations, consolidations and the sale of insurance portfolios can all be achieved using the procedure governed by Part VII of the Financial Services and Markets Act 2000. Over 100 have taken place since the procedure came into force in 2001.
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January 2007
Run-off portfolios and part VII transfers
An insurance business transfer scheme (a Part VII Transfer) under the Financial Services and Markets Act 2000 (FSMA) will only be sanctioned by the Court if, amongst other things, the transferee has the necessary regulatory authorisations and permissions to take on the business being transferred to it. Confirmation of this will need to be supplied to the Court at the final hearing to sanction the scheme in the form of a certificate from the regulator of the transferee. This will be the Financial Services Authority (FSA) where the transferee is UK authorised.
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