Companies - sanction hearing - application for the transfer of an insurance business.
Before : |
Sir Michael Birt, Commissioner, and Jurats Ronge and Austin-Vautier. |
Between |
(1) Utmost Ireland Designated Activity Company (2) Utmost PanEurope Designated Activity Company |
Representors |
IN THE MATTER OF UTMOST IRELAND DESIGNATED ACTIVITY COMPANY.
AND IN THE MATTER OF UTMOST PANEUROPE DESIGNATED ACTIVITY COMPANY.
AND IN THE MATTER OF THE INSURANCE BUSINESS (JERSEY) LAW 1996.
Advocate A. Kistler for the Representors
judgment
the commissioner:
1. This is an application by Utmost Ireland Designated Activity Company ("Utmost Ireland") and Utmost PanEurope Designated Activity Company ("Utmost PanEurope") for the Court's sanction under Article 27 and Schedule 2 of the Insurance Business (Jersey) Law 1996 to the transfer of certain long term Insurance business (carried on in or from within Jersey) from Utmost Ireland to Utmost PanEurope. ("the Jersey Scheme")
2. The transfer forms part of a larger transfer of long term insurance business from Utmost Ireland to Utmost PanEurope. We shall refer to that as the "Irish Scheme". There is also a scheme in Guernsey. The Irish Scheme, the Jersey Scheme and the Guernsey Scheme are referred to collectively as "the Scheme". Altogether just under 17,419 policies are to be transferred under the Scheme with some 547 being transferred under the Jersey Scheme.
3. Utmost Ireland is a wholly owned subsidiary of Utmost PanEurope Limited. It is therefore part of the same group as Utmost PanEurope, so it is an intra-group transfer by one member of the group to another member of the group.
4. Utmost Ireland and Utmost PanEurope each hold permissions from the Central Bank of Ireland and from the Jersey Financial Services Commission as regulators to carry on the long term insurance business which is being transferred in Ireland and in Jersey, respectively.
5. The reason for the transfer, according to the evidence before us is, that it will permit the Utmost Group to consolidate its existing book of business into one regulated entity, namely Utmost PanEurope thereby reducing the number of regulated entities within the group and reducing reporting obligations.
6. When considering applications of this nature under the Insurance Law the Court focuses on two main issues:
(i) It must be satisfied that the procedural requirements set out in paragraph 4(a) to (d) of Schedule 2 of the Law, subject to any modification by the Court of the requirements under paragraph 4(b), have been complied with.
(ii) It must consider the merits of the scheme and in particular whether it will adversely affect policyholders and whether it is fair as between the different classes of persons affected. We would point, as an example of this approach, to the case of Re Prudential Annuities Limited [2014] JRC 178A, adopting the well-known dicta of Mr Justice Hoffmann in Re London Life Association Limited (unreported) 21st February, 1989. We set that out in an earlier judgment this morning and we do not think it necessary to repeat it, but we have borne that dicta in mind.
7. Taking first the procedural requirements, as is common in cases of this nature the Court made an order on 9th August, 2019 modifying the requirements of paragraph 4(b) of Schedule 2 and giving directions as to the steps to be taken to bring the content and nature of the Jersey Scheme to the notice of Jersey policyholders.
8. We have received affidavit evidence today from which we are satisfied that the requirements of paragraph 4(a)(c) and (d) of Schedule 2, together with the requirements laid down by the Court in its order of 9th August have been complied with.
9. So we turn therefore to the substance of the Jersey Scheme and in that connection we note the following:-
(i) The report and supplemental report of the Independent Actuary, which is required by paragraph 3 of Schedule 2, concludes as follows:
(a) The Scheme produces appropriate protection for the interests of the transferring policyholders.
(b) There is no material adverse impact on the security of benefits for any group of policyholders, including the holders of the Jersey policies as a result of the Scheme.
(c) No group of policyholders, including the holders of the Jersey policies, will suffer any reduction in reasonable benefit expectations as a result of the Scheme.
The Actuary makes clear in his report that his conclusions apply equally to the Jersey Scheme.
(ii) The Irish High Court sanctioned the Irish Scheme on the 16th October and the Royal Court of Guernsey sanctioned the Guernsey Scheme on 22nd October.
(iii) No policyholder has objected to the Jersey Scheme or indeed, we are advised, to the Irish Scheme or the Guernsey Scheme.
(iv) The Jersey Financial Services Commission, a representative of whom is in Court, has confirmed that it has no objection or comment in relation to the Jersey Scheme. We should add in this connection that we were alerted to the fact that there has been a transfer of some policies with a company called Harcourt Life Designated Activity Company, but it is agreed this matter has been dealt with under the Irish Scheme and does not fall within the Jersey Scheme.
(v) The Comptroller of Taxes has confirmed that there will be no Jersey tax consequences for any Jersey policyholder as a result of the Jersey Scheme.
10. In the circumstances, applying the approach which the Court has laid down previously and having considered the matter and all the material which is before us, we are satisfied that no policyholder will suffer any material adverse effect as a result of the Jersey Scheme and that the Scheme is fair in its overall terms. Accordingly, we give our sanction to the Jersey Scheme in accordance with the draft Act produced to us.
Authorities
Insurance Business (Jersey) Law 1996.
Representation of Prudential Annuities Limited [2014] JRC 178A
Representation of London Life Association Limited (unreported) 21st February, 1989