Jurisdiction(s):
United Kingdom

Re Legal & General/ReAssure: High Court (England and Wales) sanctions Part VII FSMA transfer; guidance on policyholder balance, objectors, parental support, COVID-19, with-profits 'sunset' clauses; distinguishes Re Prudential.

Published on: 14 September 2020

Published by a LexisNexis Restructuring & Insolvency expert

Legal News

Article summary

Re Legal and General Assurance Society Ltd and another company [2020] EWHC 2299 (Ch), [2020] All ER (D) 37 (Sep)

What are the practical implications of this case?

This ruling is plainly positive for insurers and banks seeking to utilise the Part VII transfer mechanism under the Financial Services and Markets Act 2000 (FSMA 2000). Notably, the court’s method of distinguishing this transfer from that in Re Prudential Assurance Company Ltd and others [2019] EWHC 2245 (Ch) is especially helpful, enabling many schemes to progress without companies being overly anxious about contravening the Re Prudential decision. That stance should reassure stakeholders relying on established practice while still acknowledging the court’s vigilance arising from the earlier decision and debate. However, it would be incorrect to claim that the Re Prudential judgment—at least pending the outcome of the intended appeal—has no continuing effects. Certain considerations remain pertinent, albeit the degree of their importance will differ from scheme to scheme.

Balancing of interests

The most striking development in recent judicial practice has been the recalibration of how policyholder interests are set against those of the companies. In the Re Prudential judgment, the judge had determined that the companies’ interests in implementing the scheme...

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