The specialist insurer Rothesay Life has welcomed the decision from the High Court of England and Wales regarding the proposed transfer of a portfolio of annuities from The Prudential Assurance Company Limited (PAC), a subsidiary of M&G Plc, to Rothesay.
London’s High Court yesterday ruled that the transfer of £12 billion in annuity policies from M&G to Rothesay can go ahead, following the court’s initial decision to block the move.
The deal was first announced in 2018 and, according to Reuters, is set to be the largest ever such transfer, covering 400,000 policyholders. The High Court initially blocked the transfer following representations from around 1,000 policyholders, who were concerned about the financial strength of Rothesay. However, in December of last year, a UK court of appeal overturned that judgement, paving the way for a second transfer hearing.
The court’s judgement last year found that the High Court judge involved with the initial ruling “made errors in his approach to the exercise of his discretion as to the sanction of the scheme” and “ought not to have concluded that there was a material disparity between the non-contractual external support potentially available for each of PAC and Rothesay.”
In December 2020, the Court of Appeal also found that the High Court should not have given any weight to the fact that the objecting policyholders chose PAC on the basis of its age, venerability, and established reputation, and reasonably assumed that it would always provide their annuities.
Commenting on yesterday’s verdict, Rothesay stated: “The Court’s decision has provided important clarity for our whole sector. As the UK's largest pensions insurance specialist, dedicated to providing long-term security and excellent customer service, we are delighted to welcome our new policyholders to Rothesay.”
