Due Diligence for a Transfer of Engagements – Presenter: Gary Morley.
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Transcript of Due Diligence for a Transfer of Engagements – Presenter: Gary Morley.
![Page 1: Due Diligence for a Transfer of Engagements – Presenter: Gary Morley.](https://reader035.fdocuments.us/reader035/viewer/2022062321/56649e925503460f94b9871e/html5/thumbnails/1.jpg)
Due Diligence for a Transfer of
Engagements –
Presenter: Gary Morley
![Page 2: Due Diligence for a Transfer of Engagements – Presenter: Gary Morley.](https://reader035.fdocuments.us/reader035/viewer/2022062321/56649e925503460f94b9871e/html5/thumbnails/2.jpg)
What is it?
The process by a buyer investigating a target to find out
EXACTLY what he is buying, its value and risks
What is it not?
A fishing expedition
Steps to protect both parties
Why do it?
No warranties available
![Page 3: Due Diligence for a Transfer of Engagements – Presenter: Gary Morley.](https://reader035.fdocuments.us/reader035/viewer/2022062321/56649e925503460f94b9871e/html5/thumbnails/3.jpg)
Who does it?
Acquirer with help of professional advisors
Actuary
Legal
Finance/accountant
Compliance
Information Technology (IT)
Internal & External Auditors
![Page 4: Due Diligence for a Transfer of Engagements – Presenter: Gary Morley.](https://reader035.fdocuments.us/reader035/viewer/2022062321/56649e925503460f94b9871e/html5/thumbnails/4.jpg)
Areas of enquiry?
Actuary:
Solvency position – transferee & combined firms
Valuation assumptions
Expenses - transferee & combined firms
Products of transferee – associated risks
Policy management systems – integration challenges
Solvency II – impact & associated costs
![Page 5: Due Diligence for a Transfer of Engagements – Presenter: Gary Morley.](https://reader035.fdocuments.us/reader035/viewer/2022062321/56649e925503460f94b9871e/html5/thumbnails/5.jpg)
Legal:
Employment; TUPE
Litigation
Intellectual property/IT
Property ownership
Contracts (outsourcing)
Constitution
Insurance
Other areas
![Page 6: Due Diligence for a Transfer of Engagements – Presenter: Gary Morley.](https://reader035.fdocuments.us/reader035/viewer/2022062321/56649e925503460f94b9871e/html5/thumbnails/6.jpg)
Finance/accountant:
Accuracy of accounts
Assumptions / basis of valuations
Returns to FSA / HMRC
Trading subsidiaries
Assumptions relating to marketing
Tax issues
![Page 7: Due Diligence for a Transfer of Engagements – Presenter: Gary Morley.](https://reader035.fdocuments.us/reader035/viewer/2022062321/56649e925503460f94b9871e/html5/thumbnails/7.jpg)
Compliance:
Systems & Controls – Compliance Plan, ML &
Financial Crime, TCF, MI, Corporate Governance,
Outsourcing, Financial Promotions etc…
Regulatory Status & Relationships..
Business standards
Enforcement action
Persistency / Cancellation
![Page 8: Due Diligence for a Transfer of Engagements – Presenter: Gary Morley.](https://reader035.fdocuments.us/reader035/viewer/2022062321/56649e925503460f94b9871e/html5/thumbnails/8.jpg)
Information Technology (IT):
Stability of IT policyholder systems
Third party IT providers
![Page 9: Due Diligence for a Transfer of Engagements – Presenter: Gary Morley.](https://reader035.fdocuments.us/reader035/viewer/2022062321/56649e925503460f94b9871e/html5/thumbnails/9.jpg)
Internal Auditors:
Appropriateness of the firms internal function/strategy
and risk management framework, and any risks that
may arise from the approach taken
![Page 10: Due Diligence for a Transfer of Engagements – Presenter: Gary Morley.](https://reader035.fdocuments.us/reader035/viewer/2022062321/56649e925503460f94b9871e/html5/thumbnails/10.jpg)
External Auditors:
Financial controls environment
Accounting policies & balance sheet
Solvency position
Planning assumptions within ‘Financial Conditions
Report’ (FCR)
Outsourcing relationships
Unit pricing
Tax
![Page 11: Due Diligence for a Transfer of Engagements – Presenter: Gary Morley.](https://reader035.fdocuments.us/reader035/viewer/2022062321/56649e925503460f94b9871e/html5/thumbnails/11.jpg)
Land & building
Investments
Returns to FSA / HMRC
Valuations
Solvency II
![Page 12: Due Diligence for a Transfer of Engagements – Presenter: Gary Morley.](https://reader035.fdocuments.us/reader035/viewer/2022062321/56649e925503460f94b9871e/html5/thumbnails/12.jpg)
Problems:
Not knowing the unknown
Timescales
Board involvement & sign-off