Jersey Unreported Judgments

Insurance - application for sanction of a scheme in relation to Article 27 of the Insurance Business (Jersey) Law 1996.

[2015]JRC248

Royal Court

(Samedi)

2 December 2015

Before     :

Sir Michael Birt, Kt., Commissioner, and Jurats Fisher and Marett-Crosby

IN THE MATTER OF THE REPRESENTATION OF SCOTTISH WIDOWS PLC AND SCOTTISH WIDOWS ANNUITIES LIMITED AND CLERICAL MEDICAL INVESTMENT GROUP LIMITED

AND IN THE MATTER OF AN APPLICATION PURSUANT TO ARTICLE 27 OF AND SCHEDULE 2 TO THE INSURANCE BUSINESS (JERSEY) LAW 1996

Advocate S. M. Huelin for the Representor.

judgment

the commissioner:

1.        This is an application by the representors under Article 27 of Schedule 2 of the Insurance Business (Jersey) Law 1996 for the sanction of the Court to the transfer by the first and second representors of their long-term insurance business carried on in or from within Jersey to the third representor Clerical Medical.  All three companies are part of the Lloyds Bank Group and so this is an intra-group transfer.  Furthermore the Jersey scheme is part of a much larger scheme which involves the UK business of the transferors also being transferred to Clerical Medical. 

2.        The role of the Court when considering applications of this nature is well established.  The Court must consider two things.  First it must be satisfied that the procedural requirements of the Law and the Schedule have been complied with.  Secondly it must consider whether the scheme should be approved, particularly having regard to whether the interests of any of the policyholders would be adversely affected. 

3.        As to the first limb, the Court has received affidavit evidence of the steps which have been taken to draw the scheme to the attention of all the relevant policyholders.  The Court is satisfied that the procedural requirements, as reflected in the Act of 15^th July, 2015, have been complied with. 

4.        As to the merits of the scheme we note the following -

(i)        The High Court of England and Wales has approved the UK scheme and it did this on 26^th November.

(ii)       The Independent Actuary has confirmed in his report that the scheme will not materially adversely affect any group of policyholders.  We should in this connection note that there have been amendments to the Jersey scheme as compared with what it was at the time of the representation and the original report of the Independent Actuary.  These amendments have been made at the request of the UK Regulators and we have had the changes drawn to our attention.  There has been a supplementary report from the Actuary confirming that his opinion remains as previously even allowing for these comparatively minor amendments.

(iii)      The Jersey Financial Services Commission has been kept fully informed as the Law requires and has confirmed that it has no objection to the scheme.

(iv)      Confirmation has been obtained that there will be no adverse tax consequences for any Jersey policyholders.

5.        Having regard to these matters and to the papers before us, we are satisfied that the scheme should be approved. 

6.        There is one additional and unusual aspect which Advocate Huelin has very properly drawn to our attention.  The Jersey scheme refers to two previous schemes in this jurisdiction whereby business was transferred to one or other of the transferors.  Those schemes stated that they would cease to have effect and bind the transferees when all the policies transferred pursuant to those schemes ceased to be in force.  Now some of those policies are in fact still in force and are to be transferred pursuant to the current Jersey scheme.  It is necessary therefore to amend the two existing schemes so that they cease to have effect once the current Jersey scheme takes effect.  Advocate Huelin submits that the Court has jurisdiction to make such an order under paragraph 9 (e) of Schedule 2 to the Insurance Law which provides:-

"Where the Court makes an order under [Schedule 2] sanctioning a scheme, the Court may, either by that order or by any subsequent order, make provision for... such incidental, consequential and supplementary matters as are necessary to secure that the scheme shall be fully and effectively carried out."

It seems to us that that is wide enough to cover the supplementary order which is required, which is to terminate the effect of the existing schemes so that the current one can take effect.

7.        We therefore grant an order in the terms of the draft. 

Authorities

Insurance Business (Jersey) Law 1996.