Related provisions for SUP 18.2.1
1 - 4 of 4 items.
Under Principle 6, a firm must treat customers fairly (the scope of the Principle is not precisely consumers) and, under Principle 8, manage conflicts of interest fairly. A criterion for the FSA in considering a proposed scheme would be whether it appears that either Principle is not being followed. Transfers may have both positive and negative effects on individual consumers. In such circumstances it is for consumers to balance these effects and assess whether the proposed scheme
When an insurance business transfer scheme is being considered, the scheme promoters (including the transferor and, except possibly if it is a new company, the transferee) should discuss the scheme with the FSA as soon as reasonably practical, to enable the FSA to consider what issues are likely to arise, and to enable a practical timetable for the scheme to be agreed. The FSA will wish to consider material issues relating to policyholder rights (such as the reasonable expectations
If the transferor is an UK insurer and the business to be transferred includes business carried on from a branch in another EEA State, then the FSA has to consult the Host State regulator, who has 3 months to respond. The FSA will need to be given the information that the Host State regulator requires from it. This information should identify the parties to the transfer and include the transfer agreement or draft transfer agreement or a summary containing relevant information,
Where the transferor is anUK-deposit insurer and, following the transfer, it will no longer be carrying on insurance business in the United Kingdom, the FSA will need to collaborate with regulatory bodies in the other EEA States in which it is carrying on business to ensure that effective supervision of the business carried on in the EEA continues. The transferor should cooperate with the FSA and the other regulatory bodies in this process and demonstrate that it will meet the
Under section 109 of the Act, a scheme report must accompany an application to the court to approve an insurance business transfer scheme. This report must be made in a form approved by the FSA. The FSA would not expect to approve the form of a scheme report unless it complies with SUP 18.2.33 G and would expect to approve the form of a scheme report that complies. SUP 18.2.32 G and SUP 18.2.34 G to SUP 18.2.41 G provide additional guidance for the independent expert.
Where the transfer forms part of a wider chain of events or corporate restructuring, it may not be appropriate to consider the transfer in isolation and the independent expert should seek sufficient explanations on corporate plans to enable him to understand the wider picture. Likewise he will need information on the operational plans of the transferee and, if only part of the business of the transferor is transferred, of the transferor. These will need to have sufficient detail
A transfer may provide for benefits to be reduced for some or all of the policies being transferred. This might happen if the transferor is in financial difficulties. If there is such a proposal, the independent expert should report on what reductions he considers ought to be made, unless either:(1) the information required is not available and will not become available in time for his report, for instance it might depend on future events; or(2) otherwise, he is unable to report
Under the Financial Services and Markets Act 2000 (Control of Business Transfers)(Requirements on Applicants) Regulations 2001 (SI 2001/3625), unless the court directs otherwise, notice of the application must be sent to all policyholders of the parties. It may also be appropriate to give notice to others affected, in particular to:(1) reinsurers of the transferor where it is proposed that benefits or liabilities under their contracts should pass to the transferee; and(2) anyone
The FSA is entitled to be heard by the court on any application for a transfer. A consideration for the FSA in determining whether to oppose a transfer would be itsview on whether adequate steps had been taken to tell policyholders about the transfer and whether they had adequate information and time to consider it. The FSA would not normally consider adequate a period of less than six weeks between sending notices to policyholders and the date of the court hearing. Therefore
1This chapter provides guidance in relation to business transfers.(1) SUP 18.2 applies to any firm or to anymember of Lloyd's proposing to transfer the whole or part of its business by an insurance business transfer scheme or to accept such a transfer. SUP 18.2.31 G to SUP 18.2.41 G also applyto the independent expert making the scheme report.(2) SUP 18.3 applies to any firm proposing to accept certain transfers of insurance business taking place outside the United Kingdom.(3)
Insurance business transfers are subject to Part VII of the Act and must be approved by the court under section 111. The Financial Services and Markets Act 2000 (Control of Business Transfers)(Requirements on Applicants) Regulations 2001 (SI 2001/3625) also apply. These regulations set out minimum requirements for publicising schemes, notifying certain interested parties directly (subject to the discretion of the court), and giving information to anyone who requests it.
An insurance business transfer scheme is defined in section 105 of the Act and the definition has been extended to transfers from members of Lloyd's to reflect the effect of the Financial Services and Markets Act 2000 (Control of Transfers of Business Done at Lloyd's) Order 2001(SI 2001/3626). With certain exclusions (relating to some schemes approved under foreign legislation, some novations of reinsurance or some captive insurers), it includes, in broad terms, any scheme to
In the opinion of the FSA, a novation or a number of novations would constitutean insurance business transfer only if their number or value were such that the novation was to be regarded as a transfer of part of the business. A novation is an agreement between the policyholder and two insurers whereby a contract with one insurer is replaced by a contract with the other. In the opinion of the FSA, where an insurer agrees to meet the liabilities (this may include undertaking the