Insurance - application for transfer of long-term business to Phoenix Life Ltd.
Before : |
T. J. Le Cocq, Esq., Deputy Bailiff, and Jurats Fisher and Ramsden |
IN THE MATTER OF NATIONAL PROVIDENT LIFE LIMITED
AND IN THE MATTER OF PHOENIX LIFE ASSURANCE LIMITED
AND IN THE MATTER OF THE INSURANCE BUSINESS (JERSEY) LAW 1996
Advocate J. Garrood for the Representors.
judgment
the deputy bailiff:
1. This is an application under Article 27 and Schedule 2 of the Insurance Business (Jersey) Law 1996 ("the Law") for the transfer of the whole of the long-term insurance business from National Provident Life Limited to Phoenix Life Assurance Limited. Both the transferor and transferee are part of the Phoenix Group and consequently this is an intra-group transfer.
2. The transfer of the Jersey business ("the Jersey scheme") is part of a wider scheme for the transfer of the long-term insurance business in a number of jurisdictions. The UK scheme, of which the Jersey scheme is part, was approved by the High Court of England and Wales pursuant to Section 111 of the Financial Services and Markets Act 2000 on the 1st May, 2015. The Guernsey scheme, which is also part of the overall transfer of business, was approved by the Royal Court of Guernsey pursuant to Section 44 (1) of the Insurance Business (Bailiwick of Guernsey) Law 2000 on the 8th May, 2015.
3. As the Court has said, when deciding whether to sanction such a scheme the Court considers first whether the procedural requirement set out in Schedule 2 of the Law, as modified at any earlier hearing, have been complied with and secondly whether the Jersey scheme would adversely affect any policy holder (see In the Matter of the Representation of Royal London CIS Limited in the Royal London Mutual Insurance Society Limited [2014] JRC 249).
4. The requirements set out in Schedule 2 of the Law were modified by this Court in its order of the 6th January, 2015, in which the Court dispensed with the requirements under paragraph 4 (b) of the Schedule and ordered that a policy pack as defined in the order be sent to "all those holders of National Provident Life Limited policies for whom National Provident Life Limited has a current address on its computerised records."
5. As part of the application before us the Representors have sought an amendment to the Jersey scheme to reflect the correction of a typographical error but, more significantly, to make amendments to the timing of when the scheme comes into effect.
6. We have received a number of affidavits in support of this application and we are satisfied that the procedural requirements set out in Schedule 2, as modified by the directions of the Court on the 6th January, 2015, have been met.
7. As to the second aspect that we must consider, namely whether or not the Jersey scheme would adversely affect any policy holder, we have had regard to the following:-
(i) The report of the independent actuary. This states that he is satisfied that the scheme will not materially adversely impact any group of policy holders and he confirms in making that assertion that he has expressly considered the effect of the Jersey scheme and that his conclusions "apply equally to business carried on in, or from within, Jersey..... as they do to business comprising policies held by residents in the UK".
(ii) The further report of the same independent actuary considering the change of timing to which we have referred in which he states that the changes to the scheme have no effect on the conclusions reached in his original report;
(iii) The confirmation in a letter of the 11th May, 2015, from the Jersey Financial Services Commission that it has no objection to the scheme. Helpfully, a representative of the Commission was also in court and confirmed the position;
(iv) The confirmation in a letter of the 30th March, 2015, from the Comptroller of Tax to the effect that there are no Jersey tax implications for Jersey policy holders which arise as a result of the scheme;
(v) That no policy holder has appeared to object to the Jersey scheme. The only objections received were to the UK scheme before the High Court and no Jersey policy holders raised any objections there either.
(vi) The scheme has, as we have stated above, already been approved by both the High Court and the Royal Court of Guernsey.
8. The approach which this Court adopts when considering whether or not to sanction a scheme for the transfer under the Law is that set out the Norwich Union Life Insurance Society v Norwich Union Annuity Limited and Others 1997/81 [Jersey Unreported 25th April 1997] in which the Court cited with approval the dicta of Hoffman J in Re London Life Association Limited (Chancery Division) (21st February 1989) where, in an unreported judgment of the High Court of England and Wales, the learned judge set out these principles:-
"Although the statutory discretion is unfettered, it must be exercised according to principles which give due recognition to the commercial judgement entrusted by the companies' constitution to its Board. The court in my judgement is concerned in the first place with whether a policy holder, employee or other person would be 'adversely affected' by the scheme in the sense that it appears likely to leave him worse off than if there had been no scheme. It does not however follow that any scheme which leaves someone adversely affected must be rejected. For example, as we shall see, one scheme which might have been adopted in this case would have adversely affected of London Life's employees because they would have become redundant. But such a scheme might nevertheless have been confirmed by the court. In the end the question is whether the scheme as a whole is fair as between the interests of different classes of persons affected."
9. Applying that approach and in the light of the matters set out above we are satisfied that no one is adversely affected by the Jersey scheme.
10. Accordingly, we grant leave to amend the Jersey scheme in the manner requested, we sanction the Jersey scheme as amended, and we order that copies of the Jersey scheme be filed with the Jersey Financial Services Commission within 10 days or within such further period as the Commission shall allow.
Authorities
Insurance Business (Jersey) Law 1996.
Financial Services and Markets Act 2000.
Insurance Business (Bailiwick of Guernsey) Law 2000.
In the Matter of the Representation of Royal London CIS Limited in the Royal London Mutual Insurance Society Limited [2014] JRC 249.
Norwich Union Life Insurance Society v Norwich Union Annuity Limited and Others 1997/81.
Re London Life Association Limited (Chancery Division) (21st February 1989.